Supreme Court of WA|2011-03-29|Before: Corboy J

THIESS PTY LTD -v- MCC MINING (WESTERN AUSTRALIA) PTY LTD [2011] WASC 80 (29 March 2011)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : THIESS PTY LTD -v- MCC MINING (WESTERN AUSTRALIA) PTY LTD [2011] WASC 80

Administrative law - Whether a determination by an adjudicator under the Construction Contracts Act 2004 (WA) is subject to the Supreme Court's supervisory jurisdiction - Grounds on which certiorari might be granted - Construction of a privative clause

Building and construction - Security of payment - Application for leave to enforce determination made under Construction Contracts Act 2004 (WA) as a judgment - Whether adjudication application made within time or contained 'recycled' claims - Whether a respondent who is aggrieved by a decision by an adjudicator to refuse to dismiss an adjudication application can seek a review of the decision in the State Administrative Tribunal

Application for leave to enter judgment in terms of the determination granted

A J Lucas Operations Pty Ltd v Mac-Attack Equipment Hire Pty Ltd [2009] NTCA 4; (2009) 25 NTLR 14

ACD Tridon Inc v Tridon Australia Pty Ltd [2003] NSWSC 1230

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1947] EWCA Civ 1; [1948] 1 KB 223

Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes Pty Ltd [2009] WASAT 133

Brodyn Pty Ltd t/as Time Cost and Quality v Davenport [2004] NSWCA 394; (2004) 61 NSWLR 421

Buck v Bavone ((1976) [1976] HCA 24; 135 CLR 110

Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190

Cockatoo Dockyard Pty Ltd v Commonwealth of Australia (No 3) (1994) 35 NSWLR 689

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

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

Diploma Construction Pty Ltd v Windslow Corporation Ltd [2005] WASC 74

Gedeon v Commissioner of the NSW Crime Commission [2008] HCA 43; (2008) 236 CLR 120

Grocon Constructions Pty Ltd v Planit Cocciardi Joint Venture [No 2] [2009] VSC 426

Hot Holdings Pty Ltd v Creasy [1996] HCA 40; (1996) 185 CLR 149

Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd [2008] NTSC 46

Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1; (2010) 239 CLR 531

Marine & Civil Bauer Joint Venture and Leighton Kumagai Joint Venture [2005] WASAT 269

Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134

MCC Mining (Western Australia) Pty Ltd and Thiess Pty Ltd [2010] WASAT 140

Merym Pty Ltd and Methodist Ladies College[2008] WASAT 164

Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611

Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611

O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2008] WASC 58; (2008) 36 WAR 479

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

Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; (1938) 59 CLR 369

Pegram Shopfitters Ltd v Tally Weijl (UK) Ltd [2003] EWCA Civ 1750

Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2; (2003) 211 CLR 476

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

R v Connell; Ex parte Hetton Bellbird Colleries Ltd [1944] HCA 42; (1944) 69 CLR 407

R v Electricity Commissioners; ex parte London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 171

R v Hickman; Ex parte Fox [1945] HCA 53; (1945) 70 CLR 598

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

Re Harley White; Ex parte Hutt [2004] WASC 46

Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59

Re Real Estate and Business Agents Supervisory Board; ex parte Cohen [1999] WASCA 47; (1999) 21 WAR 158

Re State Administrative Tribunal; Ex parte McCourt [2007] WASCA 125; (2007) 34 WAR 342

Silent Vector Pty Ltd and Squarcini [2008] WASAT 39

Thomas-Frederic's (Construction) Ltd v Wilson [2003] EWCA Civ 1494

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

1 In May 2008, Thiess Pty Ltd (Thiess) and MCC Mining (Western Australia) Pty Ltd (MCC) entered into a contract by which Thiess agreed to provide construction services in connection with the Sino Iron Project at Cape Preston in Western Australia (the Contract).

2 On 17 May 2010, Thiess submitted to MCC a bundle of documents which it contended constituted a payment claim within the meaning of the Construction Contracts Act 2004 (WA) (CC Act) (I will adopt the parties' terminology and refer to the bundle of documents as the '17 May Letter'). The amount alleged by Thiess to be due on that 'claim' was not paid and on 12 July 2010, Thiess applied to have a 'payment dispute' determined by adjudication under the CC Act.

3 MCC contended in the adjudication that the 17 May Letter was not a payment claim within the meaning of the CC Act or that if it was such a claim, the application for an adjudication was made outside the time prescribed by the Act. It submitted that the adjudicator was bound to dismiss the adjudication application under s 31(2)(a) of the Act.

4 That submission was rejected and on 3 August 2010, the adjudicator delivered a determination (the Determination) by which he held that MCC was liable to pay Thiess the sum of $7,309,740.88, together with interest on that amount calculated from 14 June 2010 until the date of the Determination. The adjudicator further ordered that the determined amount be paid by 18 August 2010.

5 MCC has not paid the amount determined by the adjudicator and Thiess seeks orders that:

(a) leave be granted under s 43 of the CC Act for Thiess to enforce the Determination in the same manner and to the same effect as a judgment of the court;

(b) judgment be entered in terms of the Determination;

(c) MCC be required to pay Thiess interest on the sum of $7,309,740.88 from 18 August 2010 at the rate of 6% per annum pursuant to s 32 of the Supreme Court Act 1935 (WA).

6 MCC opposes the orders sought by Thiess on the ground that the Determination was 'invalid' as the adjudicator did not have jurisdiction to make a determination under the Act: see s 26 and s 31(2)(a) CC Act. MCC argues that:

(a) The adjudicator erred in finding that the 17 May Letter was a payment claim for the purpose of the CC Act. The letter was merely a further exchange in negotiations over payment of the items to which it referred.

(b) Alternatively, a payment dispute as defined by the CC Act had arisen in respect of each of the items referred to in the 17 May Letter by no later than 9 April 2010; that is, more than 28 days before Thiess made its adjudication application.

(c) Alternatively, the 17 May Letter contained 'recycled' payment claims; that is, payment claims that had been previously made and not paid and in respect of which a payment dispute had arisen well outside the 28-day period specified by s 26 CC Act for making an adjudication application.

(d) Alternatively, if the 17 May Letter was a payment claim for the purpose of the CC Act, the resulting payment dispute arose more than 28 days before Thiess' adjudication application having regard to findings made by the adjudicator about the terms on which progress claims were to be paid.

7 I have concluded that leave should be granted to enforce the Determination and that orders should be made in the terms sought by Thiess.

The proceedings commenced by MCC following the Determination

8 Following the Determination, MCC sought a review by the State Administrative Tribunal (SAT) under s 46 CC Act of the adjudicator's decision not to dismiss Thiess' adjudication application. SAT dismissed MCC's application: MCC Mining (Western Australia) Pty Ltd and Thiess Pty Ltd [2010] WASAT 140 (MCC Mining and Thiess). In doing so, it followed its earlier decision in Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134 and held that it did not have jurisdiction under s 46 CC Act to hear and decide MCC's application.

9 SAT also declined to refer a question of law concerning the meaning and effect of s 46 to the Court of Appeal, holding that the appropriate course was for MCC to seek leave to appeal from SAT's decision to dismiss its application for review. The question of law that MCC sought to have referred reflected the different views expressed by SAT in Match Projects and Beech J in O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 (O'Donnell Griffin [2009]) on the right of review conferred by s 46.

10 MCC has commenced an appeal from the Tribunal's decision. It has indicated that it will seek prerogative relief to quash the Determination if its appeal is unsuccessful.

The consequences of the difference in views over s 46 CC Act

11 The difference in the views expressed by the Tribunal and Beech J on the scope of review conferred by s 46 CC Act can be shortly stated. Section 46 provides that:

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

(2) If, on a review, a decision made under section 31(2)(a) is set aside and, under the State Administrative Tribunal Act 2004 section 29(3)(c)(i) or (ii), is reversed the adjudicator is to make a determination under section 31(2)(b) within 14 days after the date on which the decision under section 31(2)(a) was reversed or any extension of that time consented to by the parties.

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

12 Section 31(2)(a) provides that an adjudicator must dismiss an adjudication application without making a determination on the merits if certain circumstances exist, including that the adjudication application was not prepared and served in accordance with s 26.

13 In O'Donnell Griffin [2009] Beech J, in considering an application for leave to enter judgment under s 43 CC Act, suggested that s 46(1) permitted a review by SAT of decisions made under s 31(2)(a) to both dismiss an adjudication application and to refuse to dismiss the application. In that case, the defendant contended that the adjudicator had erred by not dismissing the adjudication application under s 31(2)(a) as the application was commenced outside the time prescribed by s 26. It was argued that the adjudicator's error went to his jurisdiction to make the determination; that the adjudicator's decision not to dismiss the application for an adjudication was liable to be quashed following a review of the decision by the court and that leave to enter judgment should be refused as the defendant had established an arguable case that the determination was void for want of jurisdiction.

14 Beech J entered judgment under s 43, holding that the adjudicator had not erred in finding that the plaintiff had complied with s 26. Nevertheless, he expressed his views on the defendant's submissions concerning the effect of any error made by the adjudicator in finding that the requirements of s 26 had been satisfied. He concluded that even if such an error could be characterised as jurisdictional, s 46 CC Act excluded judicial review of the adjudicator's decision under s 31(2)(a). That was because his Honour construed s 46 as conferring jurisdiction on SAT to review a decision made under s 31(2)(a) to refuse to dismiss an adjudication application.

15 In Match Projects, SAT held that s 46(1) only permitted a review of a decision to dismiss an adjudication application; SAT could not review a decision to refuse to dismiss the application. A respondent to an adjudication application who was aggrieved by a decision not to dismiss the application under s 31(2)(a) CC Act was confined to whatever remedies were conferred by general law.

16 SAT may undertake a 'merits' review of whatever decisions fall within the right conferred by s 46 CC Act. The right conferred is in respect of a 'reviewable decision' for the purpose of the State Administrative Act 2004 (WA) (SAT Act). Section 27 of that Act provides that the object of a review of such a decision is to produce the correct and preferable decision, the review being by way of a hearing de novo in which material that was not before the decision-maker may be considered. However, SAT has suggested that there is an inconsistency between the CC Act and a hearing de novo that requires s 27 to be read down, at least to the extent that it permits new material to be considered in a review under s 46 CC Act: see Marine & Civil Bauer Joint Venture and Leighton Kumagai Joint Venture [2005] WASAT 269 [63] - [71]. (It would appear from Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes Pty Ltd [2009] WASAT 133 that SAT accepts that the hearing is to be otherwise conducted as a hearing de novo: see [63].)

17 It is not necessary to consider in this application whether the Tribunal is correct in its interpretation of the CC Act and s 27 SAT Act. The short point to be made is that on the construction of s 46 CC Act favoured by Beech J, a reason for refusing to grant leave to enter judgment under s 43 would be that arguably, the correct or preferable decision was that the adjudication application ought to have been dismissed under s 31(2)(a). That interpretation would ordinarily allow more scope for argument that leave to enter judgment under s 43 ought to be refused than if a respondent is limited to those grounds that would support an application for prerogative relief given that the review in SAT is by way of a hearing de novo.

The approach that has been taken to determining this application

18 In Grocon Constructions Pty Ltd v Planit Cocciardi Joint Venture [No 2] [2009] VSC 426, Vickery J observed that the purpose of the equivalent Victorian legislation was to 'allow for the rapid determination of progress claims under construction contracts ... [t]he process was designed to ensure cash flow to businesses in the building industry, without parties getting tied up in lengthy and expensive litigation or arbitration'. Consequently, the legislation was intended to establish a procedure for the fast recovery of progress payments payable under a construction contract. The Act sought to fulfil that purpose by providing for a speedy and procedurally informal process of adjudication of payment claims that were disputed or rejected or otherwise not paid within the time prescribed by the relevant construction contract: [33] and see also [110] - [117].

19 There is no doubt that the CC Act also has that purpose. However, as the length and complexity of the decisions in Grocon and the New South Wales authorities referred to later in these reasons demonstrate, difficult questions concerning the rights of parties aggrieved by the decisions of an adjudicator have not been avoided by the apparent simplicity of the procedures prescribed by this type of legislation.

20 I have concluded that MCC has failed to establish a sufficiently arguable case to justify refusing to grant leave under s 43 that the adjudicator erred by making essentially factual findings in not dismissing Thiess' adjudication application under s 31(2)(a) CC Act It is tempting to deal with this application at that level. However, a test for determining whether Thiess ought to be granted leave under s 43 must be identified and explained, especially as MCC's arguments concern the jurisdiction of the adjudicator to have made the Determination and the effect of granting leave is to enable Thiess to enter a judgment which may then be enforced as an order of the court. That requires questions concerning the rights of a party who is dissatisfied with a decision of an adjudicator to be further considered.

21 The approach that I have adopted to the resolution of those questions has been conditioned by the view that I have formed concerning the findings made by the adjudicator. The difference in views expressed by Beech J and SAT concerning the right of review under s 46 CC Act has significant implications for an application under s 43. However, I have not sought to reconcile those differing views. Rather, for reasons that will be explained, I have had regard to each view in deciding whether to grant Thiess' application.

22 In doing so, it has been necessary to briefly consider questions concerning whether a determination under the CC Act is susceptible to judicial review and if so, on what grounds (as judicial review would be the alternative for an aggrieved respondent if SAT's interpretation of s 46 is held to be correct). Those questions include:

(a) is a determination made under the CC Act subject to the court's supervisory jurisdiction;

(b) is the adjudicator's jurisdiction to make a determination conditional on compliance with the requirements specified in s 26 - that is, do those requirements constitute 'jurisdictional facts' or 'essential requirements' for a valid determination;

(d) does s 46 CC Act exclude judicial review of a decision to refuse to dismiss an adjudication application?

23 Again, I have endeavoured to confine a review of those questions to the matters that I considered to be relevant to the determination of Thiess' application.

The principles generally relevant to an application under s 43 CC Act

24 Section 43(2) CC Act provides that a determination may, with the leave of a court of competent jurisdiction, be enforced in the same manner as a judgment or order of the court to the same effect. The Supreme Court is a court of competent jurisdiction for the purpose of s 43(2): see s 43(1).

25 Section 43 does not expressly identify the matters relevant to whether leave should be granted and consequently, it is necessary to consider the context, objects, purpose and policy of the legislation in exercising the power conferred by the section: O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2008] WASC 58; (2008) 36 WAR 479 [13] (Beech J) (I shall refer to the decision as O'Donnell Griffin [2008]). The scheme of the CC Act and its legislative history as it relates to an application under s 43 were traced by Beech J in O'Donnell Griffin [2008] and O'Donnell Griffin [2009]. I gratefully adopt, without repeating, his Honour's analysis in each of those decisions. It is necessary only to note his Honour's summary of the effect of the scheme of the Act for the purpose of an application under s 43. He stated in O'Donnell Griffin [2008] at [39] - [40] that:

The following features of the statutory scheme seem to me to be of particular relevance:

(a) The procedure for determination by an adjudicator is intended to be quick, informal and inexpensive: s 30, s 31, s 32.

(b) A determination is binding on the parties even though other proceedings relating to the substantive dispute between the parties are on foot: s 38.

(c) A party liable to pay under a determination must do so: s 39.

(d) A determination is, with very limited exceptions, final: s 41, s 46.

(e) The substantive dispute (if any) will be determined by other means (such as arbitration or litigation) involving a comprehensive process, and payments made pursuant to a determination are to be taken into account and dealt with in the resolution of the substantive dispute: s 38, s 40, s 45.

The object of the scheme is, as described in the explanatory memorandum and Second Reading Speech, to 'keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes'.

26 Section 43 CC Act is substantially identical to s 33 of the Commercial Arbitration Act 1985 (WA) (CA Act). In O'Donnell Griffin [2008], Beech J accepted a submission that the principles relevant to the exercise of the discretion conferred by s 33 CA Act assist in applying s 43(2) CC Act given the similarity in the language of each section. However, in MCC Mining and Thiess, Chaney J indicated that he did not accept that the considerations that might arise in an application for leave under s 43 CC Act were necessarily co-extensive with those that were relevant to an application under s 33 CA Act. That was because of the essential difference between a determination under the CC Act and an award under the CA Act: the former does not finally decide the rights and liabilities of the parties in respect of a payment dispute (see s 45 of the CC Act). His Honour concluded:

That distinction may give rise to considerations in the context of an application for leave to enforce a determination under the CC Act which are not applicable to the Commercial Arbitration Act 1985. Whether that proves to be the case will necessarily await decisions on questions of leave under s 43 of the CC Act which is still a relatively new provision.

27 The principles that have been applied in applications under s 33 CA Act broadly are that:

(a) The requirement for leave confers a discretion on the court: Diploma Construction Pty Ltd v Windslow Corporation Ltd [2005] WASC 74 [5] - [6], applying ACD Tridon Inc v Tridon Australia Pty Ltd [2003] NSWSC 1230.

(b) Section 33 is not a dispute resolution provision. The subject matter of the award is not referred to the court and there is no power conferred on the court to reconsider whether the award ought to have been made: Cockatoo Dockyard Pty Ltd v Commonwealth of Australia (No 3) (1994) 35 NSWLR 689, 695 (and in the context of an application under s 43 CC Act, see O'Donnell Griffin [2008] [47]).

(c) Prima facie, a party who has the benefit of an award is entitled to enforce it pursuant to s 33 CA Act. It is necessary for the party resisting leave being granted to establish a reason why the award should not be enforced: Cockatoo Dockyard (695) (and in relation to s 43 CC Act, see O'Donnell Griffin [2008] [41]).

(d) Reasons why leave might not be granted include that the award is arguably vitiated by appealable error or by circumstances making it susceptible of being set aside according to the provisions of the CA Act: Cockatoo Dockyard (695 - 696).

28 I agree with Beech J that those principles assist in considering an application under s 43 CC Act notwithstanding the observations of Chaney J concerning the difference between the finality of an award and a determination. The principles are sufficiently general that they do not cut across that difference.

29 In my view, it not possible to further refine the approach to an application under s 43 by defining more precisely the kind of the reason that would justify refusing to grant leave. In Cockatoo Dockyard, Rolfe J apparently recognised that leave to enter judgment on an award might be refused for reasons other than that there was an arguable case that the award could be set aside. However, it is not easy to envisage other reasons for refusing leave under the CC Act. There is a risk of distorting the intended application of s 43 CC Act if an unduly adjectival description of the quality of the reason required to refuse leave is adopted. I think that the most that can be said at a general level is that:

(a) With a limited exception, the determination is final on the question of the liability of a party to immediately pay the amount that is the subject of the payment dispute. Section 39 CC Act requires a party to pay an amount determined by the adjudicator. A party will seek leave under s 43 where the party liable under the determination has failed to discharge the statutory obligation imposed by s 39. Consequently, the scheme of the CC Act strongly reinforces the proposition derived from Cockatoo Dockyard that prima facie, a party who has the benefit of a determination is entitled to enforce it. That is particularly so under the CC Act, given its policy of maintaining cash flow to the parties during the performance of a construction contract.

(b) Nevertheless, the Act requires the court to oversee the entry of judgment by imposing the requirement for leave. The grant of leave gives the plaintiff access to the court's processes for enforcing its orders. Further, judgment may have significant effects on the commercial interests of the defendant within the construction industry and in many instances, the reason advanced by the defendant as to why leave should not be granted will be directed to the validity of the determination.

(c) Consequently, there must be a sufficient reason for declining to grant leave under s 43 having regard to the scheme and policy of the CC Act. What will be a sufficient reason will, of course, depend on a consideration of all of the relevant circumstances.

30 As has already been indicated, the kind of reason that might justify refusing leave to enter judgment may differ according to whether there is a right to review a decision not to dismiss an application for an adjudication under s 31(2)(a) CC Act in SAT. The answer to that question may also be relevant to determining what material the court may consider on an application under s 43 (if an aggrieved defendant is confined to seeking prerogative relief, there may be an issue as to what constitutes 'the record' where error of law is asserted; that issue would not arise if there is a right of review in SAT as the application under s 43 would proceed on the basis that the aggrieved defendant had a right to a hearing de novo to establish that the adjudicator had made a 'wrong' decision in exercising jurisdiction to make the determination).

31 Thiess provided written submissions in support of its application for leave to enter judgment prior to SAT delivering its reserved decision in MCC Mining and Thiess. That may explain, in part, the approach taken by Thiess in its written submissions. SAT delivered its decision shortly prior to when MCC provided its written submissions and the hearing of Thiess' application under s 43 was held.

32 In its written submissions, Thiess contended (rightly) that the mere fact that MCC was seeking to set aside the Determination did not provide a sufficient reason for refusing to grant leave to enter judgment under s 43. It sought to draw an analogy between an application under s 43 and the principles relevant to an application for a stay. It contended that on those principles, MCC would not obtain a stay as Thiess was entitled to the benefit of the Determination; there was no evidence that Thiess would be unable to repay MCC any amount that might ultimately be found due to it; payment of the determined amount pending MCC's attempts to set aside the Determination was consistent with the policy of the CC Act and MCC had little prospect of successfully setting aside the Determination.

(a) A purported determination made in circumstances where the adjudicator was obliged to dismiss the adjudication application was not properly a determination and was incapable of being enforced.

(b) Leave to enter judgment should be refused if a purported determination was arguably invalid and susceptible to being set aside (citing O'Donnell Griffin [2008] at [12], [44] - [49]).

(c) In substance, s 43(2) was a procedural mechanism that provided for summary judgment on the determination. In the United Kingdom, summary judgment on the adjudicator's decision made under comparable legislation will be refused where there are arguable grounds that the adjudicator lacked jurisdiction. Reference was made to the decisions of the English Court of Appeal in Thomas-Frederic's (Construction) Ltd v Wilson [2003] EWCA Civ 1494 [30], [32] - [33] and Pegram Shopfitters Ltd v Tally Weijl (UK) Ltd [2003] EWCA Civ 1750 [9] - [12] and [33].

(d) There were three matters about which the court should be satisfied in order to refuse Thiess' application under s 43:

the adjudicator's decision to accept jurisdiction (that is, to not dismiss the adjudication application) was arguably reviewable for jurisdictional error;

(ii) there were arguable grounds for setting aside the adjudicator's decision under s 31(2)(a) CC Act;

(iii) MCC was seeking to have the adjudicator's decision set aside for jurisdictional error 'in the manner mandated by this court'.

34 I do not consider that Thiess' analogy to a stay application assists in determining this application. The question of whether a stay should be granted might arise after a plaintiff has been given leave to enter judgment under s 43 CC Act. However, the factors relevant to that question do not, in my view, provide any guidance on whether the application for leave should be granted. The question of whether leave to enter judgment on a determination should be granted necessarily precedes any question of whether a stay of execution of the judgment should be allowed. The two issues should not be conflated.

35 Similarly, I did not find much assistance in the English authorities referred to by MCC in its written submissions; they merely stood for the broad proposition referred to earlier and otherwise contained no discussion of the issues that have been raised in the relevant Australian cases. Further, reference to a procedure for enforcement by summary judgment has the potential to introduce extraneous considerations in an application under s 43 CC Act and to suggest a test that does not reflect the scheme and purpose of the Act.

36 Thiess' written submissions were broadly directed to the possibility that s 46 conferred a right to review the adjudicator's decision to refuse to dismiss the adjudication application in SAT. MCC's submissions, on the other hand, focussed on matters that would be relevant to judicial review of a determination (although those matters would, of course, also be material to a review in SAT).

37 Neither party at the hearing of Thiess' application dealt in detail with the different views expressed by SAT and Beech J on the scope of the right of review conferred by s 46. Their submissions were directed primarily to whether MCC could demonstrate a reasonably arguable case that the adjudicator had made an error that went to his jurisdiction to make a valid determination. The argument was conducted primarily in the context of a possible claim for prerogative relief, notwithstanding that MCC is presently seeking to appeal from SAT's decision to refuse to conduct a review under s 46. Thiess did not contend that a decision to refuse to dismiss an adjudication application was not susceptible to judicial review (for example, it did not argue that s 46(3) excluded judicial review of a decision to refuse to dismiss an adjudication application if there was no right of review of such a decision in SAT - a possibility that was left open by Beech J in O'Donnell Griffin [2009]).

38 However, MCC put its opposition to leave being granted on alternative bases - that it had an arguable case for prerogative relief and also for establishing that MCC Mining and Thiess had been wrongly decided and that it could demonstrate on a subsequent review in SAT that the adjudicator had lacked jurisdiction to make the Determination (see at ts 20 - 22). I gave some consideration to the fairness to Thiess in proceeding on that basis as MCC's written submissions focussed entirely on the whether it had demonstrated an arguable case to quash the Determination by certiorari. However, I decided that I should consider each of the alternatives suggested by MCC having regard to the following matters:

(b) Thiess did not complain that it was prejudiced;

(c) it was open to Thiess to argue that there was no prospect of MCC succeeding in its appeal had it chosen to do so given the circumstances in which its application fell to be determined (and as I have indicated, its written submissions were provided prior to SAT delivering its reasons in MCC Mining and Thiess);

(d) subject to one qualification, the real contest between the parties in the application was on the merits of adjudicator's decision not to dismiss the adjudication application. The qualification is that Thiess conducted its argument at the hearing on the basis that MCC would be required to demonstrate that arguably the adjudicator's finding was unreasonable or irrational in a sense relevant to judicial review. That will ordinarily be a different (and higher) standard than that arguably the correct or preferable decision on a hearing de novo is that the adjudication application ought to have been dismissed. However, in this particular matter that difference did not operate in a way that was unfair to Thiess.

39 I have also concluded that MCC's appeal from the decision in MCC Mining and Thiess has sufficient merit that I should take into account the possibility of it being entitled to a review of the adjudicator's decision under s 31(2)(a) CC Act in SAT in determining this application. It is necessary to further consider the reasoning of Beech J in O'Donnell Griffin [2009] to explain how I have reached that conclusion. That decision is relevant not just to the question of the proper construction of s 46 but also to the effect of any error by an adjudicator in deciding whether the requirements of s 26 had been satisfied. That is a matter that is significant for defining the scope of judicial review of such a decision.

40 In O'Donnell Griffin [2009], Beech J commenced his analysis of the effect of any error by an adjudicator in refusing to dismiss the adjudication application under s 31(2)(a) by reviewing authorities from other jurisdictions including, in particular, the decision of the New South Wales Court of Appeal in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport [2004] NSWCA 394; (2004) 61 NSWLR 421. The New South Wales Court of Appeal has reconsidered Brodyn since O'Donnell Griffin [2009]: Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 (the occasion for the reconsideration being the High Court's decision in Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1; (2010) 239 CLR 531). It will be necessary to discuss the outcome of the appeal in Chase Oyster Bar later in these reasons.

41 Beech J also considered the judgment of Mildren J in Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd [2008] NTSC 46. The equivalent Northern Territory legislation was modelled on the CC Act and unlike the New South Wales legislation, it contains provisions that correspond with s 31 and s 46 CC Act. Mildren J held that:

(a) non-compliance with the time limit prescribed for preparing and serving an adjudication application was a question for the adjudicator and not a matter for objective determination by a court;

(b) a determination was not void if the adjudicator wrongly concluded that the time limits had been complied with;

(c) certiorari did not lie to quash a determination on the ground that the adjudication application was not prepared and served within the time limit prescribed by the Act.

42 Mildren J recognised that there were 'very significant' differences between the New South Wales and the Northern Territory statutes so that 'great care' was required in applying decisions on the New South Wales legislation. Nevertheless, he considered that Brodyn provided guidance on questions of statutory interpretation and jurisdictional error [46]. In particular, he regarded the reasoning in Brodyn as supporting the conclusions that he had reached on the effect of non-compliance with the time limits prescribed for an adjudication application.

43 Following his examination of relevant authorities from other jurisdictions, Beech J expressed his conclusions on s 26, s 31 and s 46 CC Act and the availability of judicial review for an alleged error by an adjudicator in finding that the requirements of s 26 had been satisfied (with the result that the application for an adjudication was not dismissed under s 31(2)(a)):

(a) A decision under s 26 and s 31(2)(a) CC Act sufficiently affected the parties' rights to make the determination susceptible to certiorari [100]; and see Hot Holdings Pty Ltd v Creasy [1996] HCA 40; (1996) 185 CLR 149.

(b) An adjudicator has the power to decide questions of law authoritatively and wrongly, so that the test for jurisdictional error is that applicable for an inferior court [101]; and see Re State Administrative Tribunal; Ex parte McCourt [2007] WASCA 125; (2007) 34 WAR 342.

(c) Consequently, judicial review of an adjudicator's determination is confined to the categories of jurisdictional error for the decisions of inferior courts and analogous bodies identified by the High Court in Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163.

(d) There was 'considerable force' in the respondent's submission that s 31(2)(a) unambiguously identified the essential preconditions to the exercise of jurisdiction by an adjudicator but for the effect of s 46 CC Act.

(e) Section 46(3) was in the nature of a privative clause. The presence of such a clause may be relevant to whether a particular requirement is construed as being essential to the validity of the exercise of a statutory power [112] (and see Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2; (2003) 211 CLR 476 [61] - [70]). The question was whether it was a purpose of the legislation that an act done in breach of the provision should be invalid [114].

(f) A respondent to an adjudication application who unsuccessfully argued for dismissal under s 31(2)(a) was thereby aggrieved by the 'decision' not to dismiss the application. An adjudicator who rejected a respondent's submission that the application must be dismissed may be said to have made a decision to that effect for the purpose of s 46(1) [119] - [120]. Consequently, s 46 conferred a right on the disappointed respondent to seek a review of the decision by SAT.

(g) The use of the imperative 'must' in s 31(2)(a) disclosed an intention that the non-existence of the conditions stipulated was 'fundamental and essential' to an adjudication application [120]. That supported a construction of s 46(1) that permitted SAT to review a decision to refuse an adjudication application because one of the matters referred to in s 31(2)(a) applied (for example, non-compliance with s 26). Consequently, it would not be necessary to 'preserve the availability of prerogative relief regarding errors respecting compliance with s 26 of the Act to give full force to the statutory command in s 31(2)(a)'; any error by the adjudicator could be corrected by SAT and on appeal for an error of law, by the Court of Appeal [121]. That conclusion accorded with the findings in Brodyn and Independent Fire Sprinklers that the question of compliance with s 26 was a matter for the adjudicator and on review SAT, and was not a matter for objective determination by the court [129].

(h) There would still be a question as to whether s 46(3) excluded prerogative relief even if s 46(1), properly construed, confined SAT's powers of review to a decision to dismiss an adjudication application under s 31(2)(a). However it was not necessary to decide that question [131] - [133].

44 In my view, there is much force in the proposition that a decision to refuse to dismiss an adjudication application is a decision made under s 31(2)(a) within the meaning of s 46(1). The wording of s 46(1) is general; on the face of the section what is required is a decision 'under' s 31(2)(a) rather than a decision that has a particular result.

Match Projects and MCC Mining and Thiess

45 The ultimate findings made by SAT in Match Projects and MCC Mining and Thiess have already been noted. However, it is necessary to further summarise the Tribunal's reasoning on the scope of s 46. In Match Projects, the Tribunal held that:

(a) The views expressed by Beech J in O'Donnell Griffin [2009] on the construction of s 46 and the availability of prerogative relief were not essential to the decision and although they ought to be accorded great weight, they did not bind the Tribunal: [41] - [42].

(b) Section 46(2) CC Act was not referred to by Beech J. The section supported the conclusion that SAT's powers of review under s 46 were confined to a decision by an adjudicator to dismiss an adjudication application and did not extend to a refusal to dismiss the application [43]. There were difficulties in applying s 46(2) if SAT was permitted to review a decision to refuse to dismiss an adjudication application.

(c) Further, s 37 CC Act required an adjudicator to give reasons only where the application was dismissed under s 31(2)(a) and the CC Act generally drew a distinction between a decision to dismiss an adjudication application and a determination of the payment dispute. Section 46(1) referred only to 'a decision' [45] - [48].

(d) The object of the CC Act was to provide a speedy means of enforcing payments so as to keep 'the money flowing' without finally deciding the rights of the parties in respect of the payment. The determination of a payment dispute by the adjudicator was not subject to review. That limitation was consistent with a 'bias' in the Act that the claimant should be paid if the adjudicator accepted the claim prior to any litigation to finally resolve the dispute. It accorded with that object and the scheme of the Act that the power of review under s 46 should be confined to a decision to dismiss an adjudication application. A wider power of review could frustrate the object of the Act by providing the respondent to an adjudication application with an opportunity to disrupt the adjudication process by seeking a review in SAT and possibly, by pursuing an appeal to the Court of Appeal [49] - [52].

(e) Any 'injustice' to a respondent to an adjudication application as a result of the adjudicator wrongly deciding that the application should not be dismissed was of a similar kind to that suffered by the respondent where the adjudicator was ultimately found in subsequent litigation to have wrongly determined the payment dispute [54].

46 The reasoning of the Tribunal in Match Projects indicates that the proper construction of s 46 presents difficulties. However, with respect, it is not so compelling that the possibility of MCC succeeding in its appeal can be summarily dismissed. I consider that the views of Beech J and SAT on the scope of s 46 are sufficiently arguable that they should each be taken into account in determining this application. That means that the application can be considered by reference to whether MCC has demonstrated a sufficiently arguable case that the correct or preferable decision was that the adjudication application ought to have been dismissed so as to provide a good reason for refusing to grant leave to Thiess to enter judgment on the Determination.

47 However, it is also necessary to make findings on the premise that SAT's interpretation of s 46 is correct as this was the primary basis on which the application was argued at the hearing and also, in case I am wrong in my view that the construction of the section favoured by Beech J is sufficiently arguable to be relevant to this application. That requires the question of whether a decision to refuse to dismiss an adjudication application is susceptible to judicial review to be further examined.

The scope of the Supreme Court's supervisory jurisdiction over the decisions of an adjudicator

48 In O'Donnell Griffin [2009], Beech J considered that there was 'considerable force' in the proposition that s 31(2)(a) identified 'essential preconditions' to the exercise of jurisdiction by an adjudicator to make a determination. The characterisation of the conditions as 'essential' reflected one of the categories of jurisdictional error identified by the High Court in Craig.

49 In Brodyn, Hodgson JA (with whom Mason P and Giles JA agreed) distinguished between the 'basic and essential requirements' for a valid determination and the 'more detailed requirements' specified by the New South Wales legislation. He stated at [54] - [55] that:

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 ...

The legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination: cf Project Blue Sky 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 ...

50 The significance of the distinction between an essential precondition and a more detailed requirement specified by the legislation was that certiorari would lie to quash a determination made where an essential precondition had not been satisfied; the determination was void. Certiorari would not, however, lie where there had merely been non-compliance with one of the more detailed requirements of the legislation; the determination remained valid notwithstanding non-compliance.

51 Hodgson JA further held that compliance with the time limits prescribed for making an adjudication application (s 17(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW)) was not essential for a valid determination; the time limits formed part of the detailed requirements of the Act. It was that conclusion that Mildren J in Independent Fire Sprinklers considered supported his view that certiorari would not lie to quash a determination on the ground that the adjudication application had not been prepared and served within the time limit prescribed by the Northern Territory legislation.

52 In Chase Oyster Bar, the New South Wales Court of Appeal held that:

(a) A determination by an adjudicator was in principle amenable to certiorari for jurisdictional error. The decision of the Court of Appeal in Brodyn was wrong to the extent that it might be understood as suggesting that certiorari would not lie for jurisdictional error.

(b) The provisions of the New South Wales Act that specified the time within which an adjudication application must be made imposed an essential requirement for a valid determination. The Supreme Court, in the exercise of its supervisory jurisdiction, could determine whether the application had been commenced within time and had power to set aside a determination for non-compliance by granting certiorari.

(c) The New South Wales Act did not purport to exclude judicial review. However, even if it did, the High Court had held in Kirk that it was not permissible for a State Parliament to enact a privative clause that prevented a Supreme Court from exercising its supervisory jurisdiction over jurisdictional errors.

53 It is important to note what was said by Spigelman CJ about the distinction apparently drawn in Brodyn between an essential condition for the exercise of jurisdiction and jurisdictional error (in Brodyn, an 'essential precondition' was apparently encompassed within but was narrower than the scope of 'jurisdictional error'). At [27] and following, his Honour explained that the distinction between jurisdictional and non-jurisdictional error was necessitated in Australian administrative law by the separation of powers established by Chapter III of the Constitution. The constitutional basis of the distinction for courts exercising federal jurisdiction was confirmed in Plaintiff S157/2002 v Commonwealth of Australia. Kirk identified the same distinction in State jurisdiction as arising from the fact that 'the Supreme Court of any State' in s 73(ii) of the Constitution was a 'constitutional expression': '[t]he significance of Kirk is that it has given this distinction a constitutional dimension in State law, to the same general effect as had earlier been established for Commonwealth law' [29]. Consequently, the distinction between jurisdictional and non-jurisdictional error is central in Australian administrative law, Kirk having given the distinction a constitutional element for the exercise by State Supreme Courts of their supervisory jurisdiction.

54 The general proposition that an adjudicator's determination is amenable to judicial review (subject, in this jurisdiction, to s 46 CC Act) must now be taken to have been established, at least for a judge at first instance. In addition to the decision of the New South Wales Court of Appeal in Chase Oyster Bar, the Northern Territory Court of Appeal in A J Lucas Operations Pty Ltd v Mac-Attack Equipment Hire Pty Ltd [2009] NTCA 4; (2009) 25 NTLR 14 held that prerogative relief was available to quash a determination for jurisdictional error (Mildren J distinguished Independent Fire Sprinklers by characterising the error alleged in that case as being non-jurisdictional [13]). Further, in Grocon, Vickery J concluded that determinations made by an adjudicator under the equivalent legislation in Victoria (the Building and Construction Industry Security of Payment Act 2002 (Vic)) were subject to judicial review and to relief by way of certiorari and declaration. His Honour held, by reference to cases such as R v Electricity Commissioners; ex parte London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 171, Craig and Hot Holdings, that an adjudicator had statutory authority (exercised 'governmental power') to determine questions that sufficiently affected the rights of parties to attract certiorari (the same conclusion that was reached by Beech J in O'Donnell Griffen [2009]) and that a determination had the effect of finally deciding the right of a claimant to immediate payment of its progress claim (and see the reference by SpigelmanCJ in Chase Oyster Bar to Re Real Estate and Business Agents Supervisory Board; ex parte Cohen [1999] WASCA 47; (1999) 21 WAR 158 and the discussion of Grocon in the reasons given by Basten JA).

55 Questions concerning the scope of judicial review remain. However, it is not necessary to fully consider those questions as this application is only concerned with the issue of whether a decision by an adjudicator to refuse to dismiss an adjudication application under s 31(2)(a) could provide a basis for quashing the subsequent determination and therefore, a sufficient reason for refusing to grant leave under s 43 CC Act.

56 In O'Donnell Griffin [2009], Beech J considered that the adjudicator had the power to decide questions of law authoritatively and wrongly, so that the test for jurisdictional error was that applicable for an inferior court [101]. As this case amply demonstrates, whether an applicant for an adjudication satisfied the requirements of s 26 CC Act involves mixed questions of fact and law.

57 The significance of the distinction between an inferior court and an administrative tribunal for this application lies in the scope for judicial review. The High Court in Craig identified five categories of error by an inferior court that were susceptible to judicial review. Those categories were described by the High Court in Kirk as being only examples of jurisdictional error by an inferior court; they were not to be taken as marking the boundaries of the relevant field [73]. Nevertheless, it is convenient for the purpose of this application to adopt the summary provided by McLure JA in Re Carey; Ex parte Exclude Holdings Pty Ltd [2006] WASCA 219; (2006) 32 WAR 501 at [181] of the categories of jurisdictional error identified in Craig:

The scope of jurisdictional error depends upon whether or not the decision-maker has authority either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law: Craig at 179. If it does not have authority to do either, there can be judicial review in the broad sense where the distinction between jurisdictional error and error within jurisdiction is of no practical significance. If the decision-maker has that authority, the Court's judicial review powers are confined to errors of jurisdiction in the narrow sense. The High Court in Craig identified five types or categories of such errors. ... The five categories are as follows. First, if an inferior court or an anomalous tribunal mistakenly asserts or denies the existence of jurisdiction. Second, if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist. Third, if it is an essential condition of the exercise of jurisdiction with respect to a particular matter that a certain event or requirement has in fact occurred or been satisfied (which I understand to be a reference to a jurisdictional "fact") there will be jurisdictional error if the court or a tribunal purports to act in circumstances where that event has not in fact occurred or that requirement has not in fact been satisfied even though the matter is the kind of matter which the Court has jurisdiction to entertain. Fourth, jurisdictional error will occur where an inferior court disregards or takes account of some matter in circumstances where the statute establishing it and conferring its jurisdiction requires that that particular matter be taken into account or ignored as a precondition of the existence of any authority to make an order or decision in the circumstances of the case. Fifth, it will exceed its authority and fall into jurisdictional error if it misconstrues the statute establishing it and conferring jurisdiction and thereby misconceives the nature or the function which it is performing or the extent of its powers in the circumstances of the case.

58 An administrative tribunal, however, will commit a jurisdictional error in a wider set of circumstances. In Craig, the High Court said (179):

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

59 I agree with Beech J that the adjudicator may authoritatively determine questions of law and that judicial review of a decision under s 31(2)(a) is confined to jurisdictional error of the kind referred to in Craig.

60 A jurisdictional fact refers to a 'criterion, satisfaction of which enlivens the power of the decision maker': Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 [28]; Gedeon v Commissioner of the NSW Crime Commission [2008] HCA 43; (2008) 236 CLR 120 [43]. A decision purportedly made in the exercise of a power or discretion will have been made without the necessary statutory authority if the criterion is not satisfied. So, for example, an inferior court will act beyond its jurisdiction by entertaining a matter outside the limits of its powers by, among other things, proceeding in the absence of a jurisdictional fact: Kirk [72].

61 Identifying a requirement as a jurisdictional fact is a way of expressing a conclusion derived from the process of statutory construction referred to in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355. There it was said that a better test for determining the validity of an exercise of power undertaken in breach of a statutory provision than the traditional mandatory/directory distinction was to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid [93] (McHugh, Gummow, Kirby and Hayne JJ). Regard must be had to the language of the relevant provision and the scope and object of the whole statute in determining the question of legislative purpose.

62 As the discussion in M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action (4th ed, 2009 Lawbook Co) at [4.280] and following indicates, the process of construction involved in ascertaining whether a statutory condition is a jurisdictional fact is not straight forward. A helpful discussion of the relevant principles can be found in the judgment of Spigelman CJ (with whom Mason P and Meagher JA agreed) in Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55.

63 A distinction may be made between instances where the process of construction leads to the conclusion that parliament intended that 'the factual reference can only be satisfied by the actual existence (or non-existence) of the fact or facts' and where, on a proper construction of the relevant legislation, parliament intended that the primary decision maker could authoritatively determine the existence or non-existence of the fact: Timbarra [40] - [41]. In the former instance, the court must give effect to parliament's intention by deciding for itself the existence or non-existence of the fact. In the latter case, the court will only inquire into the decision-maker's decision about the existence or non-existence of the fact: and see Chase Oyster Bar [166] - [169] (McDougall J).

64 There is a predisposition to finding that parliament intended that the decision-maker should have power to determine authoritatively a jurisdictional fact for the reasons explained by Dixon J in Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; (1938) 59 CLR 369, 391 (the inconvenience that results when the jurisdiction of a decision-maker can only be conclusively established by a court). Nevertheless, a decision on the existence or otherwise of a jurisdictional fact by a decision-maker who can authoritatively determine jurisdiction is still open to judicial review. In Chase Oyster Bar, Basten JA stated at [102] that, '[t]he opinion of the Tribunal that its jurisdiction was engaged cannot be arbitrary, capricious or irrational and must be an opinion open to a reasonable person correctly understanding the meaning of the law under which authority is conferred'. McDougall J expressed a similar view at [177].

65 Both Basten JA and McDougall J referred to a line of authority that commenced with the judgment of Latham CJ in R v Connell; Ex parte Hetton Bellbird Colleries Ltd [1944] HCA 42; (1944) 69 CLR 407, 432 and culminated in the reasons of Gummow A-CJ and Keifel J in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611. That line of authority concerns the scope of judicial review where the jurisdiction to make a decision depends on the decision maker forming an opinion or being satisfied about a matter. The inference from the dicta of Basten JA and McDougall J is that they regarded a decision on whether the time limits for making an adjudication application under the New South Wales legislation had been satisfied was analogous to a determination about a jurisdictional fact that involved the formation of an opinion.

66 In SZMDS, Gummow A-CJ and Keifel J stated at [23] - [24] that:

In Australia ...the principles applicable where the jurisdictional fact is a state of satisfaction or opinion are traced back to the use by Latham CJ in R v Connell ...of the terms 'arbitrary, capricious, irrational' as well as 'not bona fide' to stigmatise the formation of an opinion upon which a statutory power was enlivened. Subsequently, for the Supreme Court of Canada, Iacobucci J spoke of decision making upon an assumption which had no basis in the evidentiary material or which was contrary to the overwhelming weight of that material, and also of decisions based upon a contradiction in the processes by which conclusions were reached or upon the drawing of inferences which were not properly open.

A decision upon jurisdictional fact which has these characteristics is treated as a failure to exercise jurisdiction. There has been a purported exercise of public power in the absence of the necessary jurisdictional fact.

67 That passage and the statements of Basten JA and McDougall J in Chase Oyster Bar reflected the approach that Thiess contended should be taken in this matter. MCC did not demur from that proposition. It contended in its written submissions that the findings of the adjudicator concerning his jurisdiction to make the Determination were not 'reasonable'. The source of that test for error in finding a jurisdictional fact was not identified. However, it appeared to echo what was said by Brennan J in Foley v Padley [1984] HCA 50; (1984) 154 CLR 349. There, his Honour expressed his agreement with the statement by Latham CJ in R v Connell and at 370, emphasised that the issue for the court was not whether it would have formed the opinion in question but whether the repository of the power could have formed the opinion reasonably. See also Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, 653 (Gummow J) and Spigelman CJ in Timbarra at [41], where his Honour stated that the court could inquire into the reasonableness of the decision in the Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corp [1947] EWCA Civ 1; [1948] 1 KB 223).

68 In Chase Oyster Bar, Spigelman CJ considered that s 17(2) of the NSW Act - and in particular the words, 'cannot be made unless' appearing in that section - did not invoke a jurisdictional fact. Rather, the mandatory language conveyed 'the notion of a contraction in the content of what would be the power otherwise conferred' [35] (citing Gedeon v Commissioner of the NSW Crime Commission [2008] HCA 43; (2008) 236 CLR 120 [46]). That was because the New South Wales legislation did not confer on an adjudicator the power to decide whether there had been compliance with the time requirements of s 17(2). An adjudication application was made to the 'authorised nominating authority' (s 17(3)). Section 17(2) was not addressed to the adjudicator and was not a matter that s/he was directed to determine within s 22(1) of the Act (which expressly provided for the matters that were to be decided by the adjudicator) [36]. Basten JA came to a similar conclusion, holding that a challenge to an adjudicator's jurisdiction on the ground of non-compliance with an essential requirement as to the timing of an adjudication application had to be determined on the basis of facts as found by the court [97] - [101].

69 McDougall J expressed doubt as to whether there was a real distinction, at least in relation to requirements specified by s 17(2), between a jurisdictional fact and something that limited the control of the power otherwise conferred upon an adjudicator or which was to be characterised as an element of the right given by the legislation to make an adjudication application [179] - [180]. However, he agreed that the adjudicator did not have power to determine whether an applicant had complied with s 17(2), [183].

Conclusions on the scope of the court's supervisory jurisdiction for the purpose of this application

70 Plainly, the matters specified in s 31(2)(a) CC Act are essential preconditions to the valid exercise of jurisdiction by an adjudicator. That conclusion accords with the view expressed by Beech J in O'Donnell Griffin [2009] and the decisions in Chase Oyster Bar and Grocon. Compliance with s 26 is mandatory and the analysis of the New South Wales Act by McDougall J on this question applies equally to the CC Act despite the differences in the legislation. The analysis is compelling: see [207] and following.

71 Section 31(2)(a) CC Act expressly requires an adjudicator to decide the question of compliance with s 26, unlike the comparable New South Wales Act. In my view, it is not a question that must ultimately be decided by the court before the jurisdiction of the adjudicator to make a determination is authoritatively established. The court will only inquire into the adjudicator's decision under s 31(2)(a); it will not decide for itself whether, for example, the requirements of s 26 were actually met. I consider that the conclusion in Chase Oyster Bar that it was for the court to determine whether the adjudication application had been made in time does not apply to judicial review of a decision under s 31(2)(a).

72 I also consider that the better view is that the existence or otherwise of the matters referred to in s 31(2)(a) is a jurisdictional fact, assuming that there is a substantive difference between a jurisdictional fact and a 'contraction in the content of what would be the power otherwise conferred'. That reflects the legislative intent expressed in the direction to the adjudicator that s/he must dismiss the adjudication application if any of the circumstances referred to in s 31(2)(a) exist. It also reflects the scheme of the CC Act on the consequences of a determination. Neither party apparently contended to the contrary in their submissions.

73 Having regard to the way the parties' argued their respective cases, I shall apply the approach to error in jurisdictional fact finding discussed earlier in considering whether MCC has demonstrated that a sufficient reason for refusing to grant leave under s 43 CC Act is that the Determination is invalid for want of jurisdiction. That approach assumes that the adjudicator has power to authoritatively decide whether an adjudication application should be dismissed under s 31(2)(a). I will not further consider whether the decision to be made under the section involves the formation of an opinion or whether the principles identified by Gummow A-CJ and Keifel J in SZMDS apply to judicial review of all decisions on the existence of a jurisdictional fact however the 'fact' is expressed in the relevant legislation (or at least, that they apply to the review of jurisdictional fact decisions that involve mixed questions of fact and law).

74 MCC contended that in determining the application it was 'only necessary to consider if it is arguable that [the adjudicator] did not have jurisdiction to determine the merits of [Thiess'] application for adjudication (ie, whether, on the material before the adjudicator, he could reasonably have been satisfied that the essential preconditions for his jurisdiction had been met)' (MCC's written submissions dated 4 October 2010, par 34). By reference to that test, it was submitted that:

(a) if the 17 May Letter was a payment claim, the adjudicator's decision that the adjudication application was made within 28 days of a payment dispute arising was 'unreasonable' given the adjudicator's findings as to the construction of the Contract (MCC's written submissions, par 38(a));

(b) the adjudicator's finding that the 17 May Letter was a payment claim was 'unreasonable' (MCC's written submissions, par 38(b));

(c) there was 'no reasonable foundation' for finding that the 17 May Letter contained a 'separate, distinct and novel claim' rather than forming part of an ongoing negotiation (MCC's written submissions, par 61).

75 Aronson, Dwyer and Groves argue that in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59, the High Court recognised that findings of fact could be reviewed on the ground that they were substantially irrational or illogical but that unreasonableness no longer provided a basis for challenging fact finding by a decision-maker; unreasonableness could only apply to the exercise of a discretion by a decision-maker: see generally at [4.410] - [4.425] and [6.205]. However, they recognise that there have been decisions since S20/2002 that are inconsistent with their analysis (see at [4.415]) and that the irrationality ground requires 'extreme' irrationality in fact finding to justify judicial intervention. (Wednesbury unreasonableness is also an exacting standard).

76 As I have indicated, unreasonableness has been regarded as a basis for reviewing a decision on the existence or otherwise of a jurisdictional fact in cases determined prior to S20/2002. I do not propose to further consider whether unreasonableness remains a basis for reviewing a jurisdictional fact decision or whether 'extreme' or 'substantial' irrationality must be shown. Consistent with the approach identified in this section, I will assume that it is still open to MCC to argue that the adjudicator's findings can be challenged on the ground of unreasonableness in the Wednesbury sense - that unreasonableness in that sense is the kind of error contemplated by Gummow A-CJ and Keifel J in SZMDS.

77 Finally, I have not considered the extent to which MCC might be bound by findings of fact made by the adjudicator on matters that are relevant to and form part of the factual substratum for his ultimate decision that Thiess had complied with s 26 CC Act. Thiess did not seek to limit the argument by contending that MCC's submissions challenged findings of fact that were beyond the scope of judicial review. That was a matter that was considered and found to be decisive in Grocon. It has not been considered in these reasons only because it was not directly raised.

78 As previously noted, in O'Donnell Griffin [2009] Beech J left open the question of whether s 46 CC Act excluded judicial review of an adjudicator's decision to refuse to dismiss an adjudication application under s 31(2)(a).

79 Section 46(3) provides that, 'except as provided by subsection (1) a decision or determination of an adjudicator or an adjudication cannot be appealed or reviewed'. The section is not in the form usually adopted for a widely drawn privative clause. Typically, such a clause will be to the effect that a decision of the relevant court or tribunal shall not be 'challenged, appealed against, quashed or called into question' and not be 'subject to prohibition, mandamus or removal to any court by certiorari or otherwise on any account whatever' (see by way of example the clauses considered in R v Hickman; Ex parte Fox [1945] HCA 53; (1945) 70 CLR 598; Plaintiff S157/2002 v Commonwealth and Kirk). Self-evidently, s 46(3) is not in such wide terms.

80 Privative clauses are to be construed according to their proper meaning ascertained in their legislative context: see Re Harley White; Ex parte Hutt [2004] WASC 46 [13] (Le Miere J). However, privative clauses are strictly construed as it is 'presumed that the parliament does not intend to cut down the jurisdiction of the courts save to the extent that the legislation in question expressly so states or necessarily implies': Plaintiff S157/2002 [72]. So construed, I consider that s 46(3) does not prevent an aggrieved respondent from seeking prerogative relief in respect of a decision by an adjudicator to refuse to dismiss an adjudication application under s 31(2)(a).

81 In any event, State legislation may preclude judicial review by a State Supreme Court for error of law on the face of the record but not for jurisdictional error: Kirk. As the decision of the New South Wales Court of Appeal in Chase Oyster Bar indicates, an attempt by State legislation to entirely remove from a Supreme Court power to review the decision of an adjudicator would be beyond the legislative power of the State Parliament.

82 It follows that I consider that there is a strongly arguable case that a determination by an adjudicator is susceptible to judicial review. That is so regardless of how s 46 is construed. Of course, a right of review under s 46 in SAT would be very relevant to the exercise of the court's discretion to grant prerogative relief.

83 Thiess relied on an affidavit sworn by Simon Lee Welfare in support of its application. Mr Welfare is the operations manager for the Western Australian civil operations of Thiess. Mr Welfare attached a copy of the Determination to his affidavit and confirmed that MCC had not paid the amount determined by the adjudicator within the time specified by him.

84 MCC relied on an affidavit sworn by Ah Lek Tang. Mr Tang is a senior contracts engineer. He attached numerous documents to his affidavit, including copies of the Contract ('AT-37') and statutory declarations made by Mr Welfare ('AT-33') and another employee of Thiess, Mr Dewee ('AT-34') and by Mr Yue, who was employed by MCC and was the superintendent appointed for the purpose of the Contract ('AT-30').

85 My understanding is that all of the documents attached to Mr Tang's affidavit were made available to the adjudicator so that, at least at this point, MCC does not seek to rely on new material to establish that the adjudicator erred. The documents annexed to Mr Tang's affidavit include the submissions that were made by each party to the adjudicator ('AT-6' and 'AT-7').

86 An issue arose in the hearing of the application over what material the court could consider in ascertaining whether MCC had demonstrated a good reason why Thiess should not be given leave to enter judgment. There is, of course, no doubt that SAT can consider all of the evidence that was received by an adjudicator as it is required to conduct a hearing de novo. Consequently, the court can have regard to that evidence in considering whether leave to enter judgment on a determination should be granted if the relevant question is whether the defendant has shown a sufficiently arguable case that the adjudicator did not make the correct or preferable decision under s 31(2). However, that might not be so if the relevant question is whether the defendant has established a sufficiently arguable case that a determination is liable to be set aside in the exercise of the court's supervisory jurisdiction.

87 There is a distinction to be drawn between certiorari for error of law on the face of the record (non-jurisdictional error of law) and certiorari for jurisdictional error: Kirk [80]. The High Court in Craig rejected an expansive approach to what constituted the record for the purpose of reviewing the decisions of an inferior court for non-jurisdictional error. However, it is not necessary to further consider what the High Court held in Craig in determining this application as the errors for which MCC contends are said to be jurisdictional and accordingly, the court can consider all of the evidence that has been adduced by the parties: see Craig [16] - [17]. That was accepted by Thiess for the purpose of this application.

88 General condition 37 of the Contract (GC 37) concerned payment. The provisions of GC 37 that are relevant to the arguments advanced by MCC stated that:

(a) Thiess was to claim payment progressively in accordance with item 28 of Annexure Part A. Each progress claim was to be given in writing to the superintendent. Item 28 specified that a progress claim was to be submitted at the end of each month (GC 37.1).

THIESS PTY LTD -v- MCC MINING (WESTERN AUSTRALIA) PTY LTD [2011] WASC 80 (29 March 2011)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (352 paragraphs)

THIESS PTY LTD -v- MCC MINING (WESTERN AUSTRALIA) PTY LTD [2011] WASC 80 (29 March 2011)

Items 9, 11, 15, 19 and 28 (and items 1, 12, 14, 16, 20, 21 and 23 - 27)

Conclusions on whether the 17 May Letter recycled payment claims

Legislation Cited (7)

Cases Cited (22)