MATCH PROJECTS PTY LTD and ARCCON (WA) PTY LTD [2009] WASAT 134 (30 June 2009)

Last Updated: 7 July 2009

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM : COMMERCIAL & CIVIL

ACT : CONSTRUCTION CONTRACTS ACT 2004 (WA)

CITATION : MATCH PROJECTS PTY LTD and ARCCON (WA) PTY LTD [2009] WASAT 134

MEMBER : JUSTICE J A CHANEY (PRESIDENT)

MR C RAYMOND (SENIOR MEMBER)

HEARD : 18 MAY 2009

DELIVERED : 30 JUNE 2009

FILE NO/S : CC 236 of 2009

BETWEEN : MATCH PROJECTS PTY LTD

Applicant

AND

ARCCON (WA) PTY LTD

Respondent

Catchwords

Construction Contracts Act 2004 (WA) - Whether right of review extends to decision rejecting submissions for the adjudication to be dismissed - Application of doctrine of precedent - Effect of obligation to prepare application and serve other party to the contract - Whether application for adjudication properly prepared and served

Legislation:

Building and Construction Industry Security of Payment Act 1999 (NSW)

Construction Contracts Act 2004 (WA), s 6 , s 7 , s 25 , s 26 , s 26(1) , s 27 , s 31 , s 32 , s 32(2)(a)(i) (v), s 36 , s 37 , s 40 , s 41 , s 44 , s 45 , s 46 , s 46(1) , s 46(2) , s 46(3) , s 53

Construction Contracts Bill 2004

Construction Contracts Regulations 2004 (WA), reg 4, reg 5

Construction Contracts (Security of Payments) Act 2004 (NT), s 33(1)(a), s 33(1)(a)(ii), s 48

Corporations Act 2001 (Cth)

Interpretation Act 1984 (WA), s 76 , s 76(d)

State Administrative Tribunal Act 2004 (WA), s 5 , s 29(3) , s 29(3)(c)(i) , s 29(3)(c)(ii) , s 29(9) , s 91 , s 105(3)

Result:

Application for review dismissed

Category: A

Representation:

Counsel:

Applicant : Mr M Zilko SC

Respondent : Mr S Boyle

Solicitors:

Applicant : Deacons

Respondent : Clayton Utz

Case(s) referred to in decision(s):

Amflo Constructions Pty Ltd v Jefferies [2003] NSWSC 856

Bakker and City of Nedlands [2005] WASAT 106

Brodyn Pty Ltd (t/as Time Cost and Quality) v Davenport (2004) 61 NSWLR 421

Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294

Craig v State of South Australia (1995) 184 CLR 163

Deakin v Webb (Commissioner of Taxes) (1904) 1 CLR 585 at 604

Diploma Construction Pty Ltd and Esslemont Nominees Pty Ltd [2006] WASAT 350

Federal Commissioner of Taxation v Salenger (1988) 81 ALR 25

Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd [2008] NTSC 46 (14 November 2008)

Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 56

McGrath v Commonwealth (1944) 69 CLR 156

Mustac v Medical Board of Western Australia [2007] WASCA 128

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

Silent Vector Pty Ltd T/As Sizer Builders and Squarcini [2008] WASAT 39

Slack v Leeds Industrial Co-operative Society Ltd [1923] 1 Ch 431

United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1

REASONS FOR DECISION OF THE TRIBUNAL :

Summary of Tribunal's decision

1 The applicant applied for the review of a decision of an adjudicator under the Construction Contracts Act 2004 (WA). The adjudicator had declined to dismiss the application on the ground that it had not been properly served in accordance with s 26 of the Construction Contracts Act 2004 (WA) and had gone on to make a determination on the merits.

2 The Tribunal held that it was not bound by the opinion expressed in the Supreme Court decision O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 relating to the scope of decisions which were reviewable under the legislation, because the opinion was not necessary for the purposes of the Court's decision. The Court had not had the benefit of any argument on that particular issue. The Tribunal concluded that on a proper construction of the legislation, and in particular the effect of s 46(2) thereof, that the Tribunal's right of review was limited to a decision to dismiss an adjudication application on any of the grounds referred to in s 26 of the Construction Contracts Act 2004 (WA). That conclusion was consistent with the reasoning applied to similar legislation in the Northern Territory in Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd [2008] NTSC 46.

3 The above finding was determinative of the application and required that it be dismissed but the Tribunal went on to express its views on the remaining issues. Although an adjudicator is obliged to dismiss an application for adjudication in the circumstances referred to in s 26 , the Tribunal noted that an honest or bona fide exercise of power was not reviewable on the reasoning of Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd [2008] NTSC 46. But the Tribunal indicated that it was not appropriate to express a view as to whether or not prerogative relief might lie.

4 Further, the Tribunal concluded that the adjudication application had been properly served. Service had been effected at the principal place of business in Western Australia of the joint venture, which constituted an association of persons, with the result that such service was permitted under s 76 of the Interpretation Act 1984 (WA). There was also no evidence to suggest that the applicant for the adjudication had known information which should have been included in the application and, accordingly, the application had been prepared in accordance with the requirements of the legislation. The Tribunal rejected submissions that it was not open to the Tribunal to review that aspect of the matter because the question of preparation of the application had not been raised before the adjudicator.

Introduction and issues for determination

5 This is an application for review brought under s 46(1) of the Construction Contracts Act 2004 (WA) (CC Act). Unless otherwise stated, all references to particular sections are references to sections of the CC Act. The review relates to an adjudication determination made by Mr Graham Morrow on 2 December 2008. The determination was amended on 16 December 2008 under the slip rule provision, s 41 of the CC Act.

6 An extension of time to apply for the review was granted by the Tribunal, for the reasons fully set out in Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 56. A significant factor in the grant of the extension is the applicant's ( Match Projects ') contention that the effect of a Supreme Court decision handed down in O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 ( ODG John Holland ) on 6 February 2009 is that there is a right of review under s 46(1) on a wider basis than was previously considered to be the case. It is contended that the right of review is extended to include a decision to reject submissions that the adjudication application should be dismissed by the adjudicator on the grounds set out in s 31(2)(a)(i) - (iv).

7 The parties agree that the principal issues for determination are as set out at para 34 of Match Projects ' statement of issues, facts and contentions, being:

Is Match Projects entitled to seek a review of the adjudicator's decision to not dismiss the adjudication application pursuant to s 31(2)(a) without any consideration as to the merits, by reason of the respondent's ( Arccon 's) failure to comply with s 26?
Do the provisions of s 26 require strict compliance?
Was the adjudication application served in accordance with s 26?
Was the adjudication application prepared in accordance with s 26?

8 A sub-issue of issue 1 (above) is whether the Tribunal is bound by the construction placed on s 46(1) in the ODG John Holland decision.

The statutory framework

9 The CC Act was assented to on 8 July 2004, and came into effect on 1 January 2005 by proclamation in the Government Gazette of 14 December 2004 at page 5999. It was introduced to provide security of payment legislation for the building and construction industry. It applies to contracts for the carrying out of construction work and related services. It provides a rapid adjudication process, having as its primary aim to keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes while retaining the parties' full rights, if not satisfied, to go to court or use any other dispute resolution mechanism available under the contract: see Hansard, second reading speech, Legislative Assembly, 3 March 2004 at p 274/5.

10 A payment claim is defined to mean a claim under a construction contract by either a contractor against principal or vice versa relating to performance or non-performance by the contractor of its obligations, as the case might be.

11 Section 6 provides that a payment dispute arises if, relevantly, by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed. By s 7, the CC Act applies to construction contracts entered into after the CC Act comes into operation.

12 If a payment dispute arises under a construction contract, any party to the contract may apply to have the dispute adjudicated, subject to certain exceptions not relevant in this matter (s 25).

13 Section 26 governs the manner in which an application for adjudication must be prepared and served in the following terms:

Applying for adjudication

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

(a) prepare a written application for adjudication;

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

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

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

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

and

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

(2) The application –

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

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

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

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

and

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

14 The time within which the adjudication process must be completed is extremely limited. The respondent has 14 days after the date on which the application is served to prepare and serve a written response (s 27).

15 Section 31 describes the adjudicator's functions and is central to the issues to be determined. It provides as follows:

Adjudicator’s functions

(1) ...

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

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

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

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

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

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

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

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

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

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

16 The emphasis added above, and in some of the sections which follow, has been given in order to highlight a distinction in the terminology used to refer to the outcomes described in s 31(2)(a) and s 31(2)(b).

17 Section 32 requires that, for the purpose of making a determination, an appointed adjudicator must act informally and, if possible, make the determination on the basis of the application and its attachments, and, if a response has been prepared and served in accordance with s 27, the response and its attachments; the adjudicator is not bound by the rules of evidence and may inform himself or herself in any way he or she thinks fit. By subsection (2), in order to obtain sufficient information to make a determination, the adjudicator may request a party to make a further written submission or to provide information or documentation, may request the parties to attend a conference. There is also a right to inspect, arrange for testing of a thing and to engage an expert to investigate and report.

18 Section 36 provides as follows:

Determination, content of

An appointed adjudicator’s decision made under section 31(2)(b) must –

(a) be in writing;

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

(i) the amount to be paid and the date on or before which it is to be paid; or

(ii) the security to be returned and the date on or before which it is to be returned,

as the case requires;

(d) give reasons for the determination ;

(e) identify any information in it that, because of its confidential nature, is not suitable for publication by the Registrar under section 50;

(f) be given to the parties to the adjudication; and

(g) be given to the Registrar.

19 Section 37 deals with dismissed applications and provides relevantly:

(1) If under section 31(2)(a) an appointed adjudicator dismisses an application for adjudication, he or she must –

(a) give reasons for doing so; and

(b) communicate the decision and the reasons in writing to the parties.

(2) ...

20 Section 40 provides that if an appointed adjudicator determines a payment dispute concerning a claim by a contractor which is not for a final payment by the principal, and determines that the principal is to pay the contractor an amount in respect of the claim; and the principal, in accordance with the determination pays the amount, the payment is to be taken as an advance towards the total amount payable under the contract.

21 Section 41 provides that if, on the adjudication of a payment dispute, the appointed adjudicator makes a determination , it cannot be amended or cancelled except with the consent of the parties, and a party may not apply subsequently for an adjudication of the dispute. However, the adjudicator is entitled to amend the determination, either on the application of a party, or on the adjudicator's own initiative, to correct an accidental slip or omission, a material arithmetic error, or material mistake in the description of any person, thing or matter.

22 Section 44 deals with the costs of adjudications and covers the adjudicator's entitlement to payment if the adjudicator, within the prescribed time in s 31(2), dismisses an application for adjudication or makes a determination of the dispute.

23 Section 45 deals with the effect of adjudication on civil proceedings. A party is not prevented from instituting proceedings before an arbitrator or other person, or a court or other body, in relation to a dispute or other matter arising under the contract. However, if other proceedings are commenced, the adjudication is to proceed unless all the parties, in writing, require the appointed adjudicator to discontinue the adjudication.

24 Section 46, which is also central to the issues for determination, provides as follows:

Review, limited right of

(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.

25 We turn to the issues which require determination.

1. Is Match Projects entitled to seek a review of the adjudicator's decision to not dismiss the adjudication application pursuant to s 31(2)(a) by reason of Arccon 's failure to comply with s 26?

26 Specific consideration is given below to whether the manner in which the application was prepared and served complied with the legislative requirements. For present purposes, we shall consider only whether review is available on the ground that it is alleged that the application for adjudication was not prepared and served in accordance with s 26.

27 In the ODG John Holland decision, Beech J expressed the view that on a proper construction of s 46(1):

... there will be a "decision" under s 31(2)(a) for the purposes of s 46(1) , if the adjudicator:

(a) dismisses the application without making a determination of its merits in reliance on s 31(2)(a) ; or

(b) rejects a submission of a respondent to an adjudication application that the application should be dismissed under s 31(2)(a).

28 In so stating, the Court respectfully disagreed with a conclusion expressed in Diploma Construction Pty Ltd and Esslemont Nominees Pty Ltd [2006] WASAT 350 ( Diploma ). It was there held that the right of review in s 46(1) was not engaged when an adjudicator found that the adjudication application should not be dismissed, so that s 46(1) applied only when there was a dismissal under s 31(2)(a).

29 Counsel for Arccon submitted that the Tribunal is not bound by the ODG John Holland decision on the basis that the opinion expressed on the construction of s 46(1) was obiter dicta not required for the determination of the case. It is submitted that the Court was not taken through the effect of s 46(2) , which requires that if, on review, a decision made under s 31(2)(a) is set aside, and under the State Administrative Tribunal Act 2004 (WA) (SAT Act), s 29(3)(c)(i) or s 29(3)(c)(ii) is reversed, the adjudicator is to make a determination under s 31(2)(b). Further, the respondent submits that the only way that s 46 can be read without rendering s 46(2) 'a nonsense' is to limit reviews under s 46(1) to reviews of decisions to dismiss an application under s 31(2)(a).

30 Senior counsel for Match Projects submitted that the opinion expressed by the Court was not mere obiter dicta, in the form of a view expressed in passing on some matter not directly in issue. Senior counsel points out that at para 5 and para 6 of ODG John Holland the Court identified that the opposition to the application for leave to enforce the adjudicator's determination was based solely on an application to quash the determination for jurisdictional error. Thus, the real issues related to an application for a writ of certiorari or for a declaration. The main issues on the application were:

whether the application for adjudication failed to comply with s 26(1), and if so,
whether the failure of the adjudicator to reject the claim constituted an error for which certiorari should lie on ground of excess of jurisdiction.

31 It was submitted that those were the matters which had to be determined. The Court found on an analysis of the facts and the application of the CC Act to them, that the adjudicator had not erred in the manner in which he had dealt with the adjudication application. The respondents in the matter (a group operating in a joint venture) were referred to as RLJV and that acronym is also used by us. The Court continued (at para 86):

It follows from these conclusions that RLJV's application should be dismissed. There having been, on my analysis, no error by the adjudicator in relation to s 26(1), the question of whether such an error was a jurisdictional error does not arise. Nonetheless for the sake of completeness, I shall state my conclusions on the question of whether certiorari would lie in respect of an adjudication where the application for adjudication failed to comply with s 26(1) of the Act (CC Act).

32 The Court then proceeded to deal with that question and, as senior counsel submitted, did so in the same detail as if it were an issue essential for the grant of relief on the basis for which RLJV contended.

33 Beech J stated that, but for the effect of s 46, there was considerable force in submissions made on behalf of RLJV that, inter alia, the requirement that the adjudication application be prepared and served in accordance with s 26, was an essential precondition which constituted jurisdictional error in accordance with the third category identified by the High Court in Craig v State of South Australia (1995) 184 CLR 163. His Honour noted that s 46(3) is in the nature of a privative clause; that a privative clause is not to be construed in isolation from the legislation as a whole, including the provisions which may appear to place limits on the exercise of the power in question, and that the apparently conflicting provisions must be construed so as to reconcile those provisions. Further, that because it is presumed that Parliament does not intend to cut down the jurisdiction of the court save as to the extent the legislation in question expressly states or necessarily implies, privative clauses are strictly construed.

34 It was noted that the RLJV submitted that consistency between s 26 and s 31 on the one hand, and s 46(3) on the other, is achieved by construing s 46(3) as not precluding intervention for jurisdictional error arising from non-compliance with s 26, and that any other construction would defeat the intention reflected in the clear language of s 26 and s 31 by enabling an adjudicator to act inconsistently with and beyond those provisions. However, the Court went on to state that the force of those submissions was affected by the proper construction of s 46(1) which permits a person who is aggrieved by a decision not to dismiss the adjudication application to apply to this Tribunal for a review of the decision. His Honour stated:

Such a construction of s 46(1) is supported by both its language and by consideration of the scheme of the Act as a whole. An adjudicator who rejects a respondent's submission that the application must be dismissed under s 31(2)(a) may be said to have made a decision to that effect. The matters emphasised in RLJV's submissions as to the intention and purpose to be discerned from s 26 and s 31 would, in my opinion, support such a construction of s 46(1). Section 31(2)(a) stipulates that if any of the conditions in subparagraphs (i) - (iv) exist, the application must be dismissed without determining the merits. That reveals an intention that the non-existence of those conditions is fundamental and essential to an adjudication application. That intention is consistent with and advanced by a construction of s 46(1) as enabling a respondent to an adjudication application to apply to the State Administrative Tribunal for the correction of an erroneous refusal by an adjudicator to dismiss the application under s 31(2)(a).
If this construction of s 46(1) is accepted then it seems to me that much of the force of RLJV's submissions as to the construction of s 46(3) falls away. On this construction of s 46(1), it would not be necessary to preserve the availability of prerogative relief regarding errors respecting compliance with s 26 of the Act in order to give full force to the statutory command in s 31(2)(a). That is because any error by an adjudicator respecting compliance with s 26 could be corrected by invoking the right of review under s 46(1). Moreover, an appeal to this court on a question of law would lie, with leave, from the decision of the State Administrative Tribunal: State Administrative Tribunal Act 2004 (WA) s 105.
In construing the Act it is to be borne in mind that the object of the scheme created by the Act is, as described in the explanatory memorandum and the Second Reading Speech, to 'keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted disputes'. That object is, in my opinion, advanced by a construction of s 46 as:

(a) permitting a right of review under s 46(1) in relation to questions arising under s 31(2)(a); and

(b) excluding the availability of prerogative relief in relation to jurisdictional error said to be constituted by failure to dismiss under s 31(2)(a).

In my opinion the legislature can be taken to know that merits review by the State Administrative Tribunal regarding an issue of compliance with s 26 is likely to be a considerably more expeditious process than application to this court for prerogative relief.

35 Consequently, his Honour concluded that on a proper construction of the CC Act, when account is taken of s 46(1), s 46(3) and the CC Act as a whole, an intention is revealed to exclude the availability of certiorari in respect of an error regarding compliance with s 26 of the Act (para 128).

36 The contention is expressed in Match Projects ' statement of issues, facts and contentions that the Tribunal is obliged to follow a decision of the Supreme Court of Western Australia and reference is made to Mustac v Medical Board of Western Australia [2007] WASCA 128 ( Mustac ) at para 48 and para 50 and Federal Commissioner of Taxation v Salenger (1988) 81 ALR 25 at para 34.

37 In Mustac the Court of Appeal was concerned with an appeal against a decision of the Tribunal in which the then President, Justice Barker, expressed the view that he should follow the findings of a single judge of the Supreme Court, relating to certain factual issues, based on principles of comity. His Honour also clearly placed significance on his status as a judge of the Supreme Court, as being the basis upon which his Honour opined that the Tribunal, as constituted, should follow a decision of a single judge of the Supreme Court unless it is plainly wrong.

38 In the leading judgment of the Court of Appeal, his Honour, Chief Justice Martin, found that principles of comity were not applicable as between a court and a tribunal. The Chief Justice went on to also state that the significance placed on the constitution of the State Administrative Tribunal was wrong in principle. At para 50 his Honour stated:

The relationship between the decision of the courts and the functions to be formed by the Tribunal is, I think, quite straightforward. The law, as enunciated by the courts, at least those courts above the Tribunal in the appellate structure, must be applied by the Tribunal, however constituted.

39 We are clearly bound to accept, on the law as expressed in Mustac , that the Tribunal, however constituted, is bound in accordance with the doctrine of precedent, or stare decisis, by a decision of a single judge of the Supreme Court.

40 However, the doctrine of precedent does not require that a lower court, or tribunal, is bound by every statement of principle or opinion on the law expressed by the court. Statements, or dicta, which are not necessary to the decision, which go beyond the occasion and lay down a rule that is unnecessary to the deciding of the case, are not binding, although they may be of considerable persuasive force: see Deakin v Webb (Commissioner of Taxes) (1904) 1 CLR 585 at 604; McGrath v Commonwealth (1944) 69 CLR 156 at 176/7. There are different types of dicta and the weight given to them may differ.

Dicta are of different kinds and of varying degrees of weight. Sometimes they may be called almost casual expressions of opinion upon a point which has not been raised in the case, and is not really present to the judge's mind. Such dicta, though entitled to the respect due to the speaker, may fairly be disregarded by judges before whom a point has been raised and argued in a way to bring it under much fuller consideration. Some dicta, however, are of a different kind; they are, although not necessary for the decision of the case, deliberate expressions of opinion given after consideration upon a point clearly brought and argued before the court. It is open no doubt to other judges to give decisions contrary to such dicta, but much greater weight attaches to them than to the former class: Slack v Leeds Industrial Co-operative Society Ltd [1923] 1 Ch 431 at 451 per Lord Sterndale MR ( Slack ): Words and Phrases Legally Defined LexisNexis Butterworth's, 4th ed, 2007 at p 668/9.

41 The opinions expressed in ODG John Holland on the availability of prerogative relief and the consideration of the proper construction of s 46(1) for that purpose, were not necessary in order to decide the case. The Court found on the facts, and on a proper construction of the relevant provisions of the CC Act, that the adjudicator had not erred in relation to the application of s 26(1) and consequently no judicial error was demonstrated. On that basis alone, the Court held that the application should be dismissed. Having come to that conclusion, Beech J continued:

Nonetheless, for the sake of completeness, I will state my conclusions on the question of whether certiorari would lie in respect of an adjudication where the application for adjudication failed to comply with s 26(1) of the Act.

42 It follows that the opinions thereafter expressed in ODG John Holland constitute dicta. But they are dicta, falling within the second category referred to in Slack above. The views expressed should therefore be given great weight.

The construction of s 46(1)

43 As set out above, in construing s 46(1), the court in ODG John Holland gave particular consideration to s 46(1) and s 46(3). No reference was made to s 46(2) which requires that if a decision made under s 31(2)(a) is set aside and, under s 29(3)(c)(i) or s 29(3)(c)(ii) of the SAT Act, is reversed, the adjudicator is to make a determination under s 31(2)(b). This, on its face, supports a construction that a reference in s 46(1) to a decision made under s 31(2)(a) can only be to a decision made to dismiss the adjudication application. It would be absurd to require the adjudicator to make a determination on the merits, in the face of a finding, that the application should have been dismissed under s 31(2)(a), but was not.

44 It is evident from a reading of the ODG John Holland decision that both parties accepted that a respondent to an adjudication application who unsuccessfully invites dismissal by the adjudicator under s 31(2)(a) is thereby aggrieved by the decision not to dismiss and that s 46(1) applies in those circumstances (see para 119 and para 127). The Court therefore did not have the benefit of any argument focused on this issue. It was submitted for Match Projects that although the court made no reference to s 46(2), it must have been considered by the court, because the court considered the decision made in Diploma . But that was a very brief ex tempore decision, in which the Tribunal relied only on a construction of s 31(2) as supported by a reference to the second reading speech. There was no reference made to s 46(2). It was not particularly necessary to do so, given the view which was reached on the construction of s 31(2)(a) that the decision referred to was a decision to dismiss.

45 In addition to consideration of the effect of s 46(2), it is necessary to have regard to the way in which reference is made to either a decision to dismiss under s 31(2)(a), or the making of a determination in accordance with s 31(2)(b). We refer to the emphasis we have added by underlining the various references to dismissal or determination, or the equivalent references in varying parts of speech and tense, in the sections of the CC Act set out above. This reflects the maintenance of a consistent dichotomy between a decision to dismiss and a determination of an adjudication application. The making of a determination does of course embody the making of a decision. In order to make a determination, on the balance of probabilities, whether any party to the payment dispute is liable to make a payment, or to return any security, as directed by s 31(2)(b), it will usually be necessary to decide issues of fact and law. It is noted that s 36 refers to an adjudicator's decision made under s 31(2)(b) and requires that it be in writing and inter alia give reasons for the determination.

46 Nevertheless, the reasons which must be given under s 36 are the reasons for the determination. It is described as a decision made under s 31(2)(b), which directs the adjudicator only to make a determination of liability to make a payment. Under s 37, an adjudicator who dismisses an application under s 31(2)(a) must give reasons for doing so and communicate the decision and the reasons in writing to the party. Significantly, the CC Act does not impose any express obligation to provide reasons for rejecting submissions to the effect that the adjudication application should be dismissed on any of the grounds stated in s 31(2)(a). This is a surprising omission if there is a right of review of a decision not to dismiss, particularly when reasons are required if the result of the same considerations is a decision to dismiss.

47 If an adjudicator rejects submissions that the adjudication application should be dismissed on any of the grounds stated in s 31(2)(a), the only opportunity for the provision of reasons for rejecting the submissions will be by inclusion of the reasons in the reasons for the determination on the merits. If s 46(1) is interpreted as referring only to a decision to dismiss, it would be necessary for an adjudicator to provide sufficient reasons to demonstrate that a bona fide attempt has been made to exercise the relevant power and that the adjudicator substantially complied with the rules of natural justice; see Brodyn Pty Ltd (t/as Time Cost and Quality) v Davenport (2004) 61 NSWLR 421 at 441 - 442 at [55], as adopted by Mildren J in Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd [2008] NTSC 46 (14 November 2008) at [45] and [49] ( Independent Fire Sprinklers ).

48 The distinction which is maintained throughout the CC Act between a decision to dismiss under s 31(2)(a) as opposed to a decision on the merits resulting in a determination under s 31(2)(b), and the provisions relating to the giving of reasons for either a decision to dismiss, or a determination on the merits, are consistent with s 46(1) being construed as referring only to a decision to dismiss under s 31(2)(a). Further, although any application for dismissal requires a finding in relation to the issues identified in s 31(2)(a)(i) to (iv), the only decision to make under s 31(2)(a) is whether to exercise the obligation to dismiss. If the decision is not to dismiss, the adjudicator is required by s 31(2)(b) to otherwise determine on the balance of probabilities whether any payment is liable to be made or whether any security must be returned.

49 In introducing the Construction Contracts Bill 2004 on the occasion of its second reading, (Hansard, 3 March 2004, at p 274 andt 275) the Honourable Minister for Planning and Infrastructure, Ms AJ MacTiernan stated:

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

50 The comments of Campbell J in Amflo Constructions Pty Ltd v Jefferies [2003] NSWSC 856 ( Amflo Constructions ) at [25], although made in relation to the comparable New South Wales legislation, (the Building and Construction Industry Security of Payment Act 1999 (NSW)), are apposite:

A fundamental feature of the legislation is that, apart from the fact that parties to a construction contract cannot contract out of the rights given by the legislation ... nothing ... affects any of the rights that parties to a construction contract have ... the concern of the Act is with maintaining the cash flow of claimants, by enabling them to recover quickly amounts which the adjudication process says they are entitled to. It is possible for the person who pays the amount of money which an adjudication has found due to seek to reclaim that money, in court proceedings which decide what the ultimate legal rights of the parties are. An evident purpose of the Act is that, if there is to be such litigation, it will start from a position where the claimant has been paid the amount which the adjudication process has decided should be paid. [Specific references to the sections of the NSW Act omitted.]

51 As reflected in the second reading speech, when an experienced and independent adjudicator is satisfied that some payment is due, a binding determination will be made. If a decision is not made to dismiss, the adjudicator must make a determination and, by virtue of s 46(3), that determination is not subject to appeal or review. That is consistent with the bias reflected in the Amflo Constructions case and the intention reflected in the second reading speech that, although subsequent litigation might demonstrate that the adjudication determination was wrong, the respondent must pay first and then litigate to recover payment. The bias is in favour of money being paid to maintain the flow of money on the basis that payment must be made on account pending an award under a more formal arbitration or court process. It is consistent with that bias that review should only be allowed of a decision to dismiss under s 31(2)(a). If the adjudicator has erred in deciding to dismiss the application, correction of the error, on review, facilitates the flow of money pending final determination under a formal process.

52 By contrast, the object of maintaining the flow of money can be easily frustrated if a review under s 46(1) includes the review of a decision not to dismiss on any of the grounds stated in s 31(2)(a). Three of those grounds (s 31(2)(a)(i) - (iii)) are capable of objective determination. But the fourth ground that the adjudicator must dismiss if satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time, or any extension of it is not sufficient for any other reason, (s 31(2)(a)(iv)) will be affected by subjective considerations. It will not take much ingenuity to advance submissions, in many cases, that the complexity is such that the application should be dismissed and to create an impression of complexity by swamping the adjudicator with volumes of paper: see, for example, Silent Vector Pty Ltd T/As Sizer Builders and Squarcini [2008] WASAT 39. Further, there will be a right of review to this Tribunal and the opportunity for further delay by seeking leave to thereafter appeal to the Supreme Court.

53 In Independent Fire Sprinklers , Justice Mildren considered the effect of an alleged failure to comply with the requirements for service of an application for adjudication under the equivalent Northern Territory legislation, the Construction Contracts (Security of Payments) Act (2004 ) (NT) (NT Act). The NT Act is modelled on the CC Act. His Honour found that it was for the adjudicator to determine the issues identified in the section equivalent to s 31(2)(a) of the CC Act (s 33(1)(a) of the NT Act - which is in identical terms) and that if the adjudicator has jurisdiction to decide the question, and therefore also to decide it wrongly, the wrong decision is not void. The case involved an application to set aside a judgment which had been registered to enforce the adjudication determination on the grounds that the adjudication application had not been commenced within the time period prescribed under s 33(1)(a)(ii) of the NT Act. There was no suggestion that the application was misconceived because a review lay under s 48 of the NT Act, which is identical to s 46 here under consideration, save that the review is by the Local Court.

54 If Independent Fire Sprinklers is correctly decided, which we respectfully consider it is, the 'injustice' which flows from an adjudicator wrongly deciding not to dismiss an application under s 31(2)(a) may be considered no greater than the adjudicator making a wrong determination under s 31(2)(b). That may be regarded as just part of the trade off inherent in adjudication under the CC Act between speed and efficiency on the one hand, and legal precision on the other, as referred to in the second reading speech. While the risk of error is minimised by using experienced and independent adjudicators, any error resulting in a determination can be corrected by later resolution through arbitration or litigation. It is noted that at [50] of Independent Fire Sprinklers , Justice Mildren specifically concluded that relief in the nature of certiorari did not lie, inter alia, because the NT Act provides:

... only for a limited appeal if the adjudicator dismisses the application and not otherwise.

55 In our view, reading the CC Act as a whole leads to a construction, which is supported by the second reading speech, that s 46(1) refers to a decision made under s 31(2)(a), which is a decision to dismiss the adjudication application on any of the grounds there stated.

56 Match Projects endeavours to support a contrary construction by diluting the effect of s 46(2). It is submitted that it is not necessary for that section to operate as the Tribunal, as constituted, has power under s 91 of the SAT Act to make a declaratory order to the effect that the adjudication application was not prepared and served in accordance with s 26. It is submitted that it is open to the Tribunal, on review, to make any order contemplated by s 29(3) of the SAT Act which permits that the decision be affirmed, varied, or set aside, in which event the Tribunal may substitute its own decision, or send the matter back to the decision-maker for reconsideration in accordance with any directions or recommendations considered appropriate; and, in any case, the Tribunal may make any order considered appropriate.

57 We consider that, in a review under the CC Act, the Tribunal has the powers set out in s 29(3) of the SAT Act, read down to the extent necessary to ensure consistency with s 46(2) of the CC Act. This is because s 5 of the SAT Act provides that if there is any inconsistency between the SAT Act and an enabling Act, the enabling Act prevails.

58 However, the mere making of a declaration, as sought in order 3 of the application, to the effect that the adjudication application was not prepared and served in accordance with s 26 of the Act and is dismissed pursuant to s 31(2) really includes two forms of relief. It is understandable why the order has been framed in this way. A declaration on its own would be of doubtful effect because the determination would remain in place. The making of an order that the adjudication application is dismissed is presumably intended to have a legal consequence that the determination must automatically fall aside. On any basis, although different terminology might be used, the effect of what is sought is the setting aside of the decision not to dismiss and its reversal by the making of an order for dismissal.

59 We consider that the proper construction of s 46(2) read with s 29(3) of the SAT Act, is that the Tribunal has power to affirm or vary a decision being reviewed. But if the Tribunal sets aside a decision under review, and effectively reverses it, then s 46(2) is intended to require the adjudicator to make a determination on the merits, which is consistent with the interpretation we have placed on s 46(1).

60 Ultimately the theoretic possibility of a declaration being available, particularly when any such order would be attendant with the type of difficulties to which we have referred, is, in our view, an insufficient basis to rebut the construction we have placed on s 46(1) based on a consideration of the Act as a whole.

61 It follows that, with great respect, we consider that the dicta expressed in ODG John Holland relating to the proper construction of the CC Act so as to allow review of a decision not to dismiss an application for adjudication, are incorrect. It is unfortunate that the Court did not have the benefit of the arguments that were presented to the Tribunal. In the circumstances, and for the reasons given, we do not consider ourselves to be bound by ODG John Holland in relation to the construction of s 46(1), and we conclude that the only decision which is reviewable by the Tribunal is a decision to dismiss the application for adjudication under s 31(2)(a).

62 Consequently, the application for review which is before us must be dismissed. In case this matter goes further, we have nevertheless expressed our views on the remaining issues which are identified for determination.

2. Do the provisions of s 26 of the Act require strict compliance?

63 As set out above, s 26 prescribes that to apply to have a payment dispute adjudicated, a party to the contract, relevantly, within 28 days after the dispute arises, must prepare and serve a written application for adjudication on each other party to the contract. It also provides that the application must be prepared in accordance with, and contain the information prescribed by, the regulations.

64 Section 31(2)(a)(ii) requires that the adjudicator must dismiss the application if it has not been prepared and served in accordance with s 26. The language used conveys a clear obligation to comply. Arccon argues that 'strict compliance with the minutiae' of s 26(1) is not required. It submits that the context of the CC Act demands that the process of adjudication should not be subject to technical legal arguments of statutory construction. It relies upon the object of adjudication of a payment dispute set out in s 30, namely 'to determine the dispute fairly and as quickly, informally and inexpensively as possible'.

65 We do not accept that the plain wording of s 26(2) can be read down on the basis of recourse to the objectives of the adjudication process.

66 Insofar as service of the application for adjudication is concerned, strict compliance by the party applying for adjudication is required because either service is effected in a manner permitted under s 76 of the Interpretation Act 1984 (WA) (Interpretation Act) or it is not.

67 It is also clear that preparation of the application must comply with the requirements of s 26 that the application be prepared in accordance with the Construction Contracts Regulations 2004 (WA) (CC Regulations). If it is not, the adjudicator must dismiss the application. However, when regard is had to the CC Regulations, it will be seen that the information which must be provided with the application, in order that it can be prepared in accordance with the regulations, is inexact. Regulation 4 of the CC Regulations states:

Giving a person's contact details

If a person is required by these regulations to give the contact details of a person, the person required to give the details must give the address, telephone and facsimile number and ABN of the person or the person's business (or ACN of the person if there is no ABN) to the extent to which the person required to give the details knows those details.

68 Regulation 5 of the CC Regulations provides that an adjudication application must, in addition to the other information required by s 26(2), contain –

(a) the name of the appointed adjudicator or prescribed appointor and the adjudicator's or appointor's contact details;

(b) the applicant's name and contact details; and

69 Consequently, when an adjudication application is made, the adjudicator will have to make a decision, based on the materials provided, as to whether or not there has been a compliance with s 26. If it is manifest from the applicant's documentation that there has been non-compliance, the adjudicator will be bound to dismiss, but otherwise, that decision will have to be made based on all of the information provided by the parties. Thus, for example, if the respondent provides documentation which shows that the names and addresses of the respondents were known by the applicant but were not included in the application, the adjudicator would be required to dismiss the application without consideration of its merits.

70 It is submitted on behalf of Arccon that it is in any event not open to the Tribunal to review the issue of whether or not the application had been prepared in accordance with s 26. Arccon relies on s 29(9) of the SAT Act which, for the avoidance of doubt, provides that in the exercise of the Tribunal's review jurisdiction, the Tribunal's power does not extend to requiring or enabling the Tribunal to deal with a matter that is different in essence from the matter that was before the decision-maker.

71 In our view, the matter which is before us is not different in essence to that which was before the decision-maker, simply because Match Projects did not raise whether or not the application had been prepared in accordance with s 26. The adjudicator was obliged by virtue of s 31(2)(a)(ii) to dismiss the application if it had not been prepared and served in accordance with s 26. It was an issue which the adjudicator had to consider regardless of whether or not it was raised by Match Projects . If the matter was properly before us on review (contrary to our opposite conclusion above), it would be necessary to identify the powers that vested in the decision-maker and the Tribunal would have the same powers on review: see Bakker and City of Nedlands [2005] WASAT 106; Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294.

3. Was the adjudication application served in accordance with s 26 of the Act?

72 It is common cause that the application was served only on Match Projects . Further, that Match Projects is the manager of an unincorporated joint venture, comprising five companies and seven individuals, some of whom are trustees of named trusts.

73 Arccon contends that it was necessary to effect service on each of the 12 joint venturers named as 'the owner' in the contract.

74 As stated above, s 26 requires that the application be served on each other party to the contract. The adjudicator went to considerable effort in rationalising that service had been properly effected on the basis that:

service had been effected on the owners' representative;
service had been effected in compliance with the Corporations Act 2001 (Cth) (Corporations Act);
Match Projects had authority to receive service pursuant to a power of attorney granted by the owners; and
service had been effected on Match Projects as agent for the owners.

75 The contract which was entered into between Arccon and Match Projects , pursuant to the power of attorney to which reference has been made, on behalf of the named joint venturers, contains provisions which nominate Match Projects as the party which was to receive notices on behalf of the owner pursuant to the contract. The application for adjudication is not a notice pursuant to the contract.

76 The CC Act does not prescribe a method of service of documents under s 26. Section 76 of the Interpretation Act therefore determines how service is to be effected. That section reads:

Service of documents generally

Where a written law authorises or requires a document to be served, whether the word 'serve' or any of the words 'give', 'deliver', or 'send' or any other similar word or expression is used, without directing it to be served in a particular manner, service of that document may be effected on the person to be served-

(a) by delivering the document to him personally; or

(b) by post in accordance with section 75(1) ; or

(c) by leaving it for him at his usual or last known place of abode, or if he is a principal of a business, at his usual or last known place of business; or

(d) in the case of a corporation or of an association of persons (whether incorporated or not), by delivering or leaving the document or posting it as a letter, addressed in each case to the corporation or association, at its principal place of business or principal office in the State.

77 It can be noted that the section makes no provision for service on an agent.

78 Section 53 of the CC Act provides that a provision in an agreement or arrangement that purports to exclude, modify or restrict the operation of the CC Act has no effect. It is therefore not possible to contractually provide that service is to be effected on a party to the contract in any way which is not permitted under the CC Act. As the CC Act read with the Interpretation Act does not permit service on an agent, service on the owners' representative would not be good service for the purposes of s 26.

79 Service could not be validly effected under the Corporations Act because a number of the joint venturers are not corporations.

80 The power of attorney authorises Match Projects to do many things, but it did not authorise Match Projects to receive applications under the CC Act for adjudication. In any event, any such arrangement would be of no effect by reason of s 53 of the CC Act. There is, therefore, no basis upon which service could be validly effected on Match Projects simply because Match Projects is the agent for the owner in respect of the contract.

81 It is submitted on behalf of Arccon that, in any event, s 76 of the Interpretation Act permits service under any written law to be given in the case of an association of persons (whether incorporated or not) by delivering or leaving the document or posting it as a letter at the principal place of business or principal office in the State of the association (s 76(d)). Senior counsel for Match Projects referred to dictionary definitions in support of a submission that an incorporated body is a group of persons associated with some common lawful purpose in a body, normally under such a name as association, club or society: The Oxford Companion to Law , by David M Walker, Clarendon Press, Oxford, 1980.

82 The view expressed by the High Court in United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 10 is instructive.

The term 'joint venture' is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily), contributing money, property or skill.

83 Whatever might be the normal or more usual form of an association, it is clear that the High Court has recognised that a joint venture is an association of persons.

84 We do not understand Match Projects to dispute that the only address from which the joint venture carries on business is the address of Match Projects at which the application was served, being Level 1, 256 Stirling Highway, Claremont in the State of Western Australia. That address is therefore the principal place of business in the State. We accordingly find that the application was served in accordance with s 26 of the CC Act.

4. Was the adjudication application prepared in accordance with s 26?

85 There is no prescribed form for an adjudication application.

86 It is submitted on behalf of Arccon that all of the information required to be included in the application, was included within the covering letter and the application with attached documents, to the extent to which the information was known by Arccon .

87 We were not referred to any information which demonstrates that Arccon was aware of more details concerning the owners than was given in the application. In the circumstances we consider that the adjudication application was prepared in accordance with s 26 and the CC Regulations.

Order

88 The Tribunal will accordingly issue an order that:

The application for review of the decision of the adjudicator reflected in the determination made on 2 December 2008 and amended on 16 December 2008 is dismissed.

I certify that this and the preceding [88] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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JUSTICE J A CHANEY, PRESIDENT