Grocon Constructors v Planit Cocciardi Joint Venture (No. 2) [2009] VSC 426

(25 September 2009)

Last Updated: 30 September 2009

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

No. 8095 of 2009

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BUILDING CONTRACTS - Building and Construction Industry Security of Payment Act 2002 (Vic) – Circumstances in which decisions of an adjudicator and review adjudicator are subject to judicial review - Brodyn Pty Ltd v Davenport [2004] NSWCA 394 considered and not followed in part.

ADMINISTRATIVE LAW – Judicial review – Extension of time to commence proceedings for judicial review - Decisions of adjudicator and review adjudicator appointed under Building and Construction Industry Security of Payment Act 2002 (Vic) – Whether certiorari available – Grounds for certiorari - Section 85 Constitution Act 1975 (Vic) considered and applied.

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TABLE OF CONTENTS

HIS HONOUR:

Introduction

1 This matter raises important issues as to the operation in Victoria of the Building and Construction Industry Security of Payment Act 2002 (as amended) (the “Act”). More particularly, the proceeding questions the circumstances in which determinations of an adjudicator and review adjudicator appointed under the Act may be the subject to judicial review. The Plaintiff, Grocon Constructors Pty Ltd (“  Grocon  ”) seeks a declaration that the determinations of an adjudicator and review adjudicator appointed under the Act, which directed that it pay a progress payment to the defendant Planit Cocciardi Joint Venture Pty Ltd (“PCJV”), be declared void or alternatively be quashed. The form of relief sought in each case is by way of certiorari and declaration.

2 As I observed in Hickory Developments Pty Ltd v Schiavello (V ic) Pty Ltd and Anor,the Act has had a substantial effect in shifting the power balance between principals and subcontractors in construction contracts in Victoria and in other States and Territories, where legislation in similar terms and with the same objects has been enacted. Subcontractors are now in a position to promptly secure payments of progress claims with the aid of a statutory mechanism which compliments the provisions of the construction contract. Outstanding claims of the principal under the contract, arising, for example, from poor workmanship or delay, are preserved as future enforceable claims, but cannot stand in the way of prompt payment of a progress claim found to be due under the expeditious process provided for in the Act.

3 The Act came into operation in Victoria on 31 January 2003. It has since been amended by Act No. 42 of 2006. The first of the amendments came into operation on 26 July 2006. These were relatively minor. The second and more substantial group of amendments commenced on 30 March 2007. The Act, in its present amended form, applies to construction contracts entered into on or after 30 March 2007. For construction contracts entered into on or after 31 January 2003 but prior to 30 march 2007, the Act in its unamended form applies, save for the minor amendments which became operative on 26 July 2006.

4 The proceedings in this matter arise out of an agreement made on or about 5 May 2008 (the “Engineering Design Agreement”), pursuant to which PCJV agreed to provide design works for  Grocon  in respect of the roofing and light tower design for a construction project known as the Melbourne Rectangular Stadium at Olympic Park in Melbourne, Victoria (the “Project”). Between about November 2007 and December 2008, PCJV provided electronic and hard copy shop drawing services for  Grocon  in respect of the steel roof and light towers for the Project, with further materials being provided in early February 2009.  Grocon  paid to PCJV, up to and including the period of January 2009, the sum of $2,482,869 (plus GST) for services in respect of the Project.

5 The Act in its present form, as amended by the Building and Construction Industry Security of Payment (Amendment) Act 2006 (Act No. 42 of 2006), therefore applies.

Progress Payment Claim History

6 The matter which is the subject of the present application for judicial review has its origin in claims made by PCJV for the payment of progress payments under the Engineering Design Agreement which PCJV says are due and payable to it under the Act.

7 By payment claims made progressively by PCJV against  Grocon  during the operation of the Engineering Design Agreement, PCJV claimed payment for progress payments pursuant to the Act for the months of September, October, November and December 2008. The payment claims related to work said to have been performed during the periods ending 26 September 2008 (invoice 00000015), 24 October 2008 (invoice 00000016), 28 November 2008 (invoice 00000017) and 5 December 2008 (invoice 00000018). The total of the sums claimed amounted to $544,841.

8 PCJV made a further payment claim against  Grocon  dated 24 April 2009 claiming the sum of $544,841 pursuant to the Act (the “24 April Payment Claim”). The invoice constituting the payment claim dated 24 April 2009 comprised PCJV’s invoice 00000020 which related to and claimed for work performed during the periods ending 26 September 2008 (invoice 00000015), 24 October 2008 (invoice 00000016), 28 November 2008 (invoice 00000017) and 5 December 2008 (invoice 00000018).

9 On 8 May 2009  Grocon  issued a payment schedule in respect of the 24 April Payment Claim pursuant to the Act, denying any sum was due from it to PCJV.  Grocon  ’s payment schedule stated that the sum due to PCJV was nil, and identified in that schedule an “excluded amount” of $544,841.

10 On 21 May, 2009, PCJV then lodged an application for an adjudication determination pursuant to the Act. The second defendant (“O’Brien”) was appointed as the adjudicator. Both  Grocon  and PCJV lodged written submissions with O’Brien.

11 O’Brien delivered his adjudication determination on 28 May 2008 (“the O’Brien determination”). O’Brien determined that PCJV was entitled to be paid by way of interim payment under the Act the amount of $544,841 (“the adjudicated amount”) together with costs of the adjudication.

12 On 23 June 2009 and subsequently, Grocon  informed PCJV in writing that it objected to the O’Brien determination, stating it was contrary to law, and affected by jurisdictional error and/or breaches of procedural fairness.

13 On 26 June 2009, in compliance with the statutory pre-conditions for the conduct of an adjudication review,  Grocon  paid $552,305 into a designated trust account pursuant to s.4 and s.28F of the Act, to be held with the National Australia Bank branch at 330 Collins Street Melbourne.  Grocon  also gave to PCJV the required notice of the payment pursuant to s.28F of the Act. On the same day,  Grocon  issued a review application of the O’Brien determination pursuant to s.28B of the Act on the sole ground that the adjudicated amount was in respect of a variation which was not a claimable variation under s.10A of the Act and was accordingly an excluded amount of $544,841 as defined by s.10B(2)(a) of the Act.

14 The third defendant (“Davenport”) was appointed as the review adjudicator under the Act.  Grocon  and PCJV both lodged written submissions with Davenport in the course of the review adjudication.

15 On 5 July 2009, Davenport delivered his review adjudication determination (“the Davenport review determination”). By his review determination Davenport confirmed the O’Brien determination. He further determined that  Grocon  was to pay the review determination fees.

Litigation History

16 The plaintiff in this proceeding (" Grocon  "), issued a generally indorsed writ against the defendant ("PCJV") dated 6 January 2009 (the “Principal Proceeding”). The claim made by  Grocon  in summary is that by an agreement made on or about 5 May 2009 (the “Engineering Design Agreement”) PCJV agreed to provide electronic and hard copy shop drawings for  Grocon  in respect of the steel roof and light towers for the construction project known as the Melbourne rectangular Stadium at Olympic Park in Victoria (the “Project”).

17 Grocon  alleges breaches of the Engineering Design Agreement in that PCJV is said to have failed to provide the design drawings required under the agreement.  Grocon  claims relief which includes damages. A statement of claim was filed in the Principal Proceeding dated 19 February 2009. The statement of claim alleged a further agreement said to have been made on 8 January 2009, whereby PCJV is alleged to have agreed to provide to  Grocon  a body of electronic documents in return for payment of a sum of $175,690.90.  Grocon  alleges breaches of the further agreement. PCJV subsequently filed its defence and counterclaim dated 23 March 2009. PCJV seeks payment for variations both on the basis of a contractual variations and representations allegedly made in breach of s.52 Trade Practices Act 1974 (Cth) (the “TPA”). It also seeks relief by reason of alleged unconscionable conduct arising from alleged breaches of s.51AA and 51AC TPA, and in equity. A claim founded on quantum meruit and restitution then follows. Also included in PCJV’s counterclaim was a claim for progress payments said to have been payable pursuant to the Building and Construction Industry Security of Payment Act 2002 .  Grocon  delivered its reply and defence to counterclaim on 29 May 2009. Following an interlocutory hearing before me on 6 May 2009, the paragraphs of PCJV’s counterclaim which pleaded the entitlement to progress payments under the Act were discontinued in the Principal Proceeding.

18 The present matter had its origin in an application made by  Grocon  in the Principal Proceeding seeking an interlocutory injunction. It did so by its summons filed in the Principal Proceeding dated 16 July 2009 (the “Injunction Proceeding”).  Grocon  's summons sought to restrain PCJV from seeking to take action in respect of the Davenport review determination dated 5 July 2009. It also challenged the O’Brien determination dated 18 June 2009 and sought similar orders in respect of it.

19 On 27 July 2009 I determined  Grocon  ’s application in the Injunction Proceeding in its favour and granted an injunction in the following terms:

Until the final determination of this proceeding or further order, the defendant by itself, its servants or agents is restrained from seeking to enforce by judgment or otherwise any alleged entitlement arising pursuant to a review adjudication determination made by Phillip Davenport dated 5 July 2009, or any adjudication determination made by John O'Brien dated 18 June 2009, other than by a final order made in this proceeding.

20 Ancillary orders were also made in the Injunction Proceeding which included an order that  Grocon  was to issue, file and serve an application for judicial review of the adjudication decision and the adjudication review decision, the subject of this proceeding. I also made orders for the speedy hearing of the application for the judicial review in the Technology, Engineering and Construction list, and consequential orders to facilitate this course.

Originating Motion for Judicial Review – Extension of time to Commence

21  Grocon  now seeks judicial review of both the O’Brien determination and the Davenport review determination.

22 On 31 July 2009  Grocon  issued its originating motion and a summons on the originating motion in proceeding No. 8095 of 2009 in accordance with Rule 56, Supreme Court General Civil Procedure Rules 2005 (the “Judicial Review Proceeding”). The originating motion seeks orders that the adjudication determination, being the O’Brien determination, and the adjudication review determination, being the Davenport review determination, be declared unlawful and void; or alternatively that they be quashed.

23 A proceeding for judicial review must be commenced within 60 days after the date when grounds for the grant of the relief or remedy claimed first arose: r.56.02(1). If the relief or remedy claimed is in respect of, inter alia, a determination, time commences to run from the date of the determination: r.56.02(2). Time shall not be extended except in special circumstances: r.56.02(3).

24 In this case, the relevant dates of each determination were 28 May 2009 in respect of the O’Brien determination, and 5 July 2009 in respect of the Davenport review determination.  Grocon  was within time in filing its originating motion in respect of the Davenport review determination, but was 4 days out of time in respect of the O’Brien determination. Should, therefore, an extension of time be permitted to entertain judicial review of that decision?

25 The question as to whether special circumstances exist which might justify an order extending time, has been the subject of consideration by this Court in a number of cases: Denysenko v Dessau; Lovejoy v Myer Stores Ltd; Lednar v Magistrates’ Court; Mann v Medical Practitioners Board of Victoria; and Mokbel v DPP . In Denysenko v Dessau Beach J held that in the context of r.56.02(3) the existence of even a demonstrable error on the part of the tribunal at first instance did not satisfy the test. “Special circumstances” were said to be limited to those which related to the plaintiff’s failure to commence a proceeding within the time provided for, and not the decision sought to be reviewed. However, the trend of authority has since moved away from this position.

26 In Mokbel v DPP, Gillard J cited with approval the approach of Osborn J in Mann v Medical Practitioners Board of Victoria, in which his Honour observed in Mann:

It is not, in my view, appropriate to seek to judicially define the meaning of the phrase “special circumstances” in the relevant rule. The phrase is deliberately flexible and designed to encompass cases which might not easily be anticipated by more prescriptive words.

27 On the appeal in Mann v Medical Practitioners Board of Victoria, Hansen AJA, with whom Chernov and Nettle JJA agreed, could see no error of principle in the trial Judge’s consideration of the meaning of the phrase “special circumstances”. His Honour said:

His Honour's concluding observations on the application of the phrase concerned the question whether error in the decision under review could constitute a special circumstance. His observations were obiter in view of his conclusion that the decision of the Board was not affected by error. Nevertheless, as his observation conflicts with the absolute statement of Beach J in Denysenko , I should say something about the issue. There were two reasons for Beach J's conclusion. First, a holding that an erroneous decision constituted a special circumstance would result in an aggrieved party being able to ignore the 60 day requirement knowing that he or she could successfully apply for an extension of time when minded to do so. Secondly, error in decision making by a judicial officer, whether of fact or law, was not "special". Neither of those factors can be denied, at least in the absence of other factors. It may however be considered that the generality of the phrase, for the evident purpose of comprehending an infinite and unforeseeable range of circumstances, would indicate that Beach J expressed the proposition in terms that were too absolute. In other words, in a particular case an approach that absolutely excluded error as a factor, no matter what the circumstances and nature of the error, may produce unintended injustice. I would leave the question open for consideration in an appropriate case.

28 I respectfully adopt the observations of Osborn J In Mann at first instance and those of Hansen AJA on the appeal. The phrase “special circumstances”, as it is used in r.56.02(3), are words of considerable width, generality and flexibility. They defy an exhaustive definition, and do not warrant specific limitation. The concept encompasses an infinite and unforeseeable range of circumstances. Provided such “special circumstances” exist, the gateway may be opened to ensure that a plaintiff is not shut out from making an application for judicial review in cases where an extension of time should be granted in the interests of justice.

29 In this case I am satisfied that there are special circumstances within the meaning of r.56.02(3) which justify the grant of an extension to file the originating motion seeking judicial review of the O’Brien determination out of time. In the first place, the filing of the originating motion was only 4 days out of time. Second, the challenge made by the plaintiff to the Davenport review determination, is founded in part upon the alleged invalidity of the O’Brien determination. This ground for reviewing the Davenport review determination could have been advanced, whether or not the O’Brien determination was also the subject of a discrete application for judicial review. Third, the proceedings in this matter have had a somewhat unique history. The present matter had its origin the Injunction Proceeding which I have described. This commenced upon  Grocon  issuing its summons on 16 July 2009; I determined that application on 27 July 2009. In the course of the hearing,  Grocon  delivered a draft of its proposed grounds for judicial review of both the O’Brien and the Davenport determinations. Orders were made in the Injunction Proceeding on 27 July 2009 which included an order that  Grocon  was to issue, file and serve an application for judicial review of the adjudication decision and the adjudication review decision, the subject of this proceeding.  Grocon did not delay unreasonably in undertaking this exercise, and filed its originating motion on 31 July 2009. Finally, no point was taken by PCJV that Grocon  ’s originating motion was out of time in respect of the O’Brien determination.

30 In the interests of justice, I will make an order that, pursuant to r.56.02(3), having found the presence of special circumstances, the time for the plaintiff to file and serve its originating motion insofar as it relates to the O’Brien determination, be extended to 31 July 2009.

31 The relief claimed by  Grocon  is on the following bases:

As to the O’Brien determination, it:]

(i) was contrary to law,

(ii) demonstrated an error of law on the face of the record constituted by the O’Brien determination,

(iii) was tainted by jurisdictional error; and/or

(iv) was in breach of O’Brien’s obligation to give procedural fairness.

As to the Davenport review determination, it:

(v) was contrary to law,

(vi) demonstrated an error of law on the face of the record constituted by the Davenport review determination,

(vii) was tainted by jurisdictional error, and/or

(viii) was in breach of Davenport’s obligation to give procedural fairness.

32 The trial of the Judicial Review Proceeding was conducted on 20 and 21 August 2009. These reasons relate to the determination of that matter.

The Building and Construction Industry Security of Payment Act 2002 (Vic)

33 The Building and Construction Industry Security of Payment Act 2002 was introduced in Victoria to allow for the rapid determination of progress claims under construction contracts or sub-contracts, and contracts for the supply of goods or services in the building industry. The process was designed to ensure cash flow to businesses in the building industry, without parties get tied up in lengthy and expensive litigation or arbitration . It was intended to establish a process for the fast recovery of progress payments payable under a construction contract. This was to be achieved by a novel procedure which provided for the rapid adjudication of payment disputes at a low cost to the parties. The amendments introduced into the Act which operate from 31 March 2007 reinforce the scheme by creating, inter alia, a fast track system for enforcing payment in the courts through an expedited process for the entry of judgment founded on a certificate evidencing the adjudication determination and an affidavit of non-payment

34 These observations find support in the outline of the Act provided in Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd where I canvassed the purposes and objects of the Act, and the procedures designed to implement them, in some detail.

Whether an Adjudicator is Amenable to Certiorari

The Prerogative Writ of Certiorari

35 A review of the history of the prerogative writ of certiorari is to be found in Re McBain; Ex parte Australian Catholic Bishops Conference. To this I would add a reference to the historical analysis of Denning LJ in R v Northumberland Compensation Appeal Tribunal; ex Parte Shaw in which the origins of the writ were chronicled. His Lordship said:

The origin of this controlling power was the writ of certiorari, by which the King commanded the judges of any inferior Court of Record to certify the record of any matter in their court with all things touching the same, and to send it to the King's Court to be examined. The wording of the writ was for many centuries as follows, being originally in Latin and afterwards in English: "We being willing for certain reasons that all and singular orders made by you (as is said) be sent by you before us, do command that you do send forthwith before us all and singular the said orders with all things touching the same, as fully and perfectly as they have been made by you and now remain in your custody or power, together with this our writ, that we may cause further to be done thereon what of right and according to "the law and custom of England we shall see fit to be done." I would pause for a moment to notice the amplitude of this writ. The record of the inferior court is to be sent up so that the King's Bench may cause to be done thereon "what of right and according to the law and custom of England" ought to be done. The width of these words is only matched by the width of the words used by the great masters of the law in speaking of certiorari. Thus Joseph Chitty in his book on practice written in 1833, vol. 2, at p.353, said: "As an essential mode of exercising a control over all inferior courts, the Court of King's Bench has a most extensive power to bring before it their proceedings and fully to inform itself upon every subject essential to decide upon the propriety of the proceedings below. This is effected by a writ called certiorari. The writ issues in civil as well as criminal cases ..." Thus such a writ was ordered to be issued to the judge of an inferior jurisdiction to return and certify the practice of his court: see Williams v Bagot . Ninety years later Lord Sumner used words of equal width: The supervision by certiorari "goes to two points: one is the area of the inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the law in the course of its exercise": see Rex v Nat Bell Liquors Ltd .

These generous observations, with the greatest of respect, understate the legal strictures in the path of the remedy in its contemporary form.

36 A central issue which arises in this case is whether the determinations of an adjudicator or a review adjudicator appointed under the Act are amenable to certiorari. Save where it is necessary to do so for the purposes of these reasons, I will not deal with all of the applicable principles which pertain to prerogative relief in the nature of certiorari.

Adjudicator Not an ‘Inferior Court’

37 In Craig v South Australia the High Court said:

In considering what constitutes "jurisdictional error", it is necessary to distinguish between, on the one hand, the inferior courts which are amenable to certiorari and, on the other, those other tribunals exercising governmental powers which are also amenable to the writ. Putting to one side some anomalous exceptions, the inferior courts of this country are constituted by persons with either formal legal qualifications or practical legal training. They exercise jurisdiction as part of a hierarchical legal system entrusted with the administration of justice under the Commonwealth and State constitutions. In contrast, the tribunals other than courts which are amenable to certiorari are commonly constituted, wholly or partly, by persons without ordinary hierarchical judicial structure. While normally subject to administrative review procedures and prima facie bound to observe the requirements of procedural fairness, they are not part of the ordinary hierarchical judicial structure. [Emphasis added]

38 On any view an adjudicator appointed under the Act is not an inferior court, and cannot be amenable to certiorari on that score. Neither an adjudicator or a review adjudicator exercise jurisdiction as part of the hierarchical legal system entrusted with the administration of justice in the sense described in Craig. Although adjudicators perform a function analogous to the traditional task of a court, namely the ascertainment and enforcement of existing legal rights, they are not part of the ordinary hierarchical judicial structure. Further, there is no statutory requirement that they have formal legal qualifications or practical legal training.

Adjudicator Exercises Power which is Amenable to Certiorari

39 It was submitted by  Grocon  that certiorari does not apply to decisions of adjudicators under the Act because they do not exercise “governmental powers”. The NSW Court of Appeal in Brodyn v Davenport did not determine this issue, but questioned whether an adjudicator appointed under the Act is a tribunal exercising governmental powers to which the remedy in the nature of certiorari lies. The following was said by the Court of Appeal in obiter:

However, it is to be noted that each of the three cases referred to in the passage from Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 was a case concerning tribunals exercising governmental powers; and Craig itself indicated that the remedy was limited to inferior courts and such tribunals. There is a real question whether an adjudicator is properly considered a tribunal exercising governmental power.

And further:

...it is by no means clear that an adjudicator is a tribunal exercising governmental powers, to which the remedy in the nature of certiorari lies.

40 The passage in Craig referred to by the Court of Appeal in Brodyn is that referred to above.

41 “Governmental power” may be defined in common usage as power exercised by the State which enables it to carry out its proper functions. An adjudicator appointed under the Act plays no part in making a decision which is regulatory or executive in nature. Rather the character of the decision making of an adjudicator is quasi-judicial. Nevertheless, in Craig this latter function was accepted by the High Court as involving the exercise of “governmental power”, provided the body in question falls within the well accepted accepted criteria which render it amenable to the prerogative writ.

42 In Craig, the High Court said in an early passage in the judgment:

That writ [the prerogative writ of certiorari] went only to an inferior court or to certain tribunals exercising governmental powers.

As to the “certain tribunals exercising governmental powers”, three seminal cases are cited by the High Court, namely: R v Electricity Commissioners; Ex parte London Electricity Joint Committee Co (1920) Ltd ; Ridge v Baldwin ; and O’Reilly v Mackman.

43 In R v Electricity Commissioners Atkin LJ pronounced his much-quoted statement:

The matter comes before us upon rules for writs of prohibition and certiorari which have been discharged by the Divisional Court. Both writs are of great antiquity, forming part of the process by which the King's Courts restrained courts of inferior jurisdiction from exceeding their powers. Prohibition restrains the tribunal from proceeding further in excess of jurisdiction; certiorari requires the record or the order of the court to be sent up to the King's Bench Division, to have its legality inquired into, and, if necessary, to have the order quashed. It is to be noted that both writs deal with questions of excessive jurisdiction, and doubtless in their origin dealt almost exclusively with the jurisdiction of what is described in ordinary parlance as a Court of Justice. But the operation of the writs has extended to control the proceedings of bodies which do not claim to be, and would not be recognized as, Courts of Justice. Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs. [Emphasis added]

44 In Ridge v Baldwin, Lord Reid reinforced the concept enunciated by Atkin LJ in R v Electricity Commissioners, but introduced a tectonic shift. The duty to act judicially was held not to be a pre-requisite for a body to be amenable to the prerogative writs.

45 Then in O’Reilly v Mackman, Lord Diplock entrenched the position when he observed:

The pre-1977 Order 53, like its predecessors, placed under considerable procedural disadvantage applicants who wished to challenge the lawfulness of a determination of a statutory tribunal or any other body of persons having legal authority to determine questions affecting the common law or statutory rights or obligations of other persons as individuals. It will be noted that I have broadened the much-cited description by Atkin LJ in Rex v Electricity Commissioners , Ex parte London Electricity Joint Committee Co (1920) Ltd. [1924] 1 KB 171 , 205 of bodies of persons subject to the supervisory jurisdiction of the High Court by prerogative remedies (which in 1924 then took the form of prerogative writs of mandamus, prohibition, certiorari, and quo warranto) by excluding Atkin LJ's limitation of the bodies of persons to whom the prerogative writs might issue, to those "having the duty to act judicially." For the next 40 years this phrase gave rise to many attempts, with varying success, to draw subtle distinctions between decisions that were quasi-judicial and those that were administrative only. But the relevance of arguments of this kind was destroyed by the decision of this House in Ridge v Baldwin [1963] UKHL 2 ; [1964] AC 40 , where again the leading speech was given by Lord Reid. Wherever any person or body of persons has authority conferred by legislation to make decisions of the kind I have described, it is amenable to the remedy of an order to quash its decision either for error of law in reaching it or for failure to act fairly towards the person who will be adversely affected by the decision by failing to observe either one or other of the two fundamental rights accorded to him by the rules of natural justice or fairness, viz. to have afforded to him a reasonable opportunity of learning what is alleged against him and of putting forward his own case in answer to it, and to the absence of personal bias against him on the part of the person by whom the decision falls to be made. [Emphasis added]

46 Then in Council of Civil Service Unions v Minister for the Civil Service (the “CCSU case”) Lord Diplock expressed the opinion, which has been much quoted since, that:

To qualify as a subject for judicial review the decision must have consequences which affect some person (or body of persons) other than the decision-maker, although it may affect him too. It must affect such other person either:

(a) By altering rights or obligations of that person which are enforceable by or against him in private law; or

(b) By depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision-maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.

47 Although there is some contemporary case law which appears to favour a return to the earlier formulation of Atkin LJ in R v Electricity Commissioners, that of Lord Diplock as stated in O’Reilly v Mackman and the CCSU case is preferably cited. I will call this the “legal rights test”. For example in Byrne v Marles, Kaye J said this about the availability of prerogative relief generally:

During the last eighty years the courts have broadened the description of the bodies and persons who are subject to the supervisory jurisdiction of superior courts by exercise of the prerogative remedies. The high water mark of that process is the speech of Lord Reid in Ridge v Baldwin . It is now recognised that relief in the form of certiorari, prohibition, mandamus and quo warranto is available in respect of any determination of a statutory tribunal or other body of persons which has the legal authority to determine questions affecting the common law or statutory rights or obligations of persons or individuals. [Footnotes omitted]

48 Accordingly, and on the basis of the “legal rights test” as I have described it, “tribunals exercising governmental powers”, as the concept was used by the High Court in Craig, may be taken to refer to any statutory tribunal or other body of persons which has the legal authority to determine questions affecting the common law or statutory rights or obligations of persons or individuals. The determination of any such body will be amenable to the prerogative writs of certiorari, prohibition, mandamus and quo warranto.

Whether Adjudicators Satisfy the “Legal Rights Test”

49 In my opinion, an adjudication determination is susceptible to the writ of certiorari because it affects rights in the relevant sense and thereby satisfies the “legal rights test”. It follows that, prima facie, the determinations of adjudicators are amendable to the writ of certiorari. They are clothed with legal authority to make a binding determination for the purposes of the Act which affect the statutory rights or obligations of persons or individuals who are claimants for progress payments under the Act or who are respondents to such claims. A similar conclusion was arrived at by McDougall J in Musico & Ors v Davenport & Ors and Palmer J in Multiplex Constructions Pty Ltd v Luikens in considering the analogous legislation in New South Wales.

50 An adjudication determination cannot finally resolve all of the rights of the parties under the applicable construction contract; they are left to be determined by later proceedings in the event of a continuing dispute. Nevertheless, an adjudication determination does have the effect of finally determining the right of a claimant to immediate payment of its progress claim. This has a discernable or apparent legal effect upon rights, sufficient to found certiorari: Hot Holdings Pty Ltd v Creasy. In O’Donnell Griffin Pty Ltd v John Holland Pty Ltd. Beach J pointed to a number of features of the equivalent statutory scheme which operates in Western Australia, in arriving at a similar conclusion.

51 In Victoria, the Act provides for the following legal effects of an adjudication determination:

(a) subject to a limited right of review by an appointed review adjudicator under Part 3, Division 2A, the amount determined by an adjudicator and a review adjudicator is binding, and the respondent must pay that amount to the claimant: s.28M and s.28N;

(b) if the respondent fails to pay the whole or any part of the adjudicated amount, the consequences provided for in the Act may follow: s.28O. These include:

(i) a right of the claimant to request, and the duty of the nominating authority to provide, an adjudication certificate: s.28O(i)(a) and s.28Q;

(ii) the right of a claimant to suspend further work: s.28O(1)(b) and s.29;

(iii) the claimant may obtain a judgment in a court of competent jurisdiction for the adjudicated amount, based on the adjudication certificate; and

(iv) the claim can then be enforced as a judgment debt: s.28R.

(c) Further, there is a facility to obtain a statutory assignment of monies due from a third party which are payable to a recalcitrant respondent: ss.29A–41.

52 Further, even if the added requirement is called for, so that an adjudicator is also required to act in a judicial manner before certiorari will apply, I make such a finding. The fact that adjudication proceedings under the Act are markedly circumscribed does not detract from their “judicial” character. The process is commenced because there is a dispute between the parties as to a monetary entitlement under a construction contract; an independent person, the adjudicator, is appointed to adjudicate the dispute: s.18(7) & (8); the adjudicator must be impartial at least to the extent that he or she is not directly interested in the construction contract as a party or as an employee of a party: s.19(2) (a) & (b); the issues are defined by a payment claim and a response to the claim: s.18 and s.21; submissions of the parties, including relevant documentation in support, are put before the adjudicator: s.22(2)(c) and (d); the adjudicator may call for further submissions, and must give the other party an opportunity to comment on those submissions: s.22(5)(a); the adjudicator is obliged to make a determination in writing and to give reasons for the determination: s.23(3); and an adjudicator is rendered immune from suit: s.46. Broadly the same procedures apply in relation to review adjudicators.

53 Accordingly, an adjudicator appointed under the Act exercises power which is prima facie subject to review by certiorari, and an adjudication determination or adjudication review determination made under the Act, is amenable to the writ.

Adjudicator is not a Private Body

54 A factor which may operate to exclude the application of certiorari turns on the question as to whether the relevant body is constituted as a private, as opposed to a public body. If it is the latter, provided that the power exercised is also amenable to certiorari, the writ will lie. On the other hand, if the body is purely private in nature, even though it may have legal authority to determine questions affecting the rights or obligations of individuals and a duty to act in a judicial manner, certiorari generally will not lie, save in the circumstance discussed hereafter.

55 The point is well illustrated by reference to a privately appointed arbitrator. On one view, the position of an adjudicator appointed under the Act is somewhat analogous to that of an arbitrator appointed by private parties pursuant to an arbitration agreement which commits their dispute to the determination of an arbitrator. It may be observed that even a private arbitration is a process is not without legislative support. Pursuant to the provisions of the Commercial Arbitration Act 1984 the award of an arbitrator may be enforceable as a judgment or order of the Court. Section 33 provides:

An award made under an arbitration agreement may, by leave of the Court, be enforced in the same manner as a judgment or order of the Court to the same effect, and where leave is so given, judgment may be entered in terms of the award.

56 However, it is well accepted that an arbitrator’s award, resulting from the appointment of a private arbitrator, is not amenable to prerogative writ. Lord Denning in R v Northumberland Compensation Appeal Tribunal, Ex Parte Shaw, at one point in his judgment, referred specifically to awards of arbitrators and pointed out that:

The Court of King’s Bench never interfered by certiorari with the award of an arbitrator, because it was a private tribunal and not subject to the prerogative writs.

57 However, in the case of adjudicators appointed under the Act, there is a critical point at which the process of private arbitration, and the adjudication process, diverge. The source of the power of the privately appointed arbitrator is contractual and stems from the arbitration agreement arrived at by the parties. Indeed, the sole source of the arbitrator’s power is a consensual submission to his or her jurisdiction. On the other hand, the appointment of an adjudicator under the Act, and the exercise the adjudicator’s powers, has its source in the statute. Although the dispute in question will have emerged from a private construction contract, the resolution of any dispute arising out of a payment claim has been made under the Act, is governed entirely by the legislation.

58 In R v National Joint Council for the Craft of Dental Technicians (Disputes Committee) et al, Ex p. Neale, (the “Dental Technicians case”) the question was whether the named Council was a private arbitration body constituted by agreement or a statutory entity. Lord Goddard CJ, after some general remarks on the scope of the prerogative writs, said:

There is no instance of which I know in the books where certiorari or prohibition has gone to any arbitrator except a statutory arbitrator , and a statutory arbitrator is one to whom by statute the parties must resort . [Emphasis added]

59 The observation of Lord Goddard in the cited passage is well illustrated by a Canadian case, Port Arthur Shipbuilding Co v Arthurs et al. Here the Supreme Court of Canada considered the question whether the Court had by certiorari a power to review the award made by an employment board of arbitration, established under the provisions of The Labour Relations Act, RSO 1960 c.202. The parties to a collective agreement were required under the legislation to arbitrate their dispute. There was no alternative course of action open to them. The legislation compelled recourse to an arbitration board. It was held that the board, being a statutory creation to which the parties were compelled to refer their dispute, was subject to review in the courts by certiorari. Judson J, who delivered the judgment of the Court, said:

The wording [of the statute] is clear and unambiguous. The parties to a collective agreement must arbitrate their dispute. There is no alternative course of action open to them. The legislation compels recourse to an arbitration board and that board is therefore a statutory creation and hence subject to review in the Courts by certiorari.

60 In approaching the matter in this way, the Supreme Court did not depart from the decision of the Court of Appeal for Ontario in Re International Nickel Co. of Canada Ltd and Rivando in its consideration of the same statutory provision. Aylesworth JA, who delivered the judgment of the Court, said:

Consideration of these statutory provisions makes it abundantly clear that the parties are under compulsion to arbitrate their differences. The parties are directed by statute as to the matters which must be governed by arbitration; they are told that they must abide by the award and they are also told, (a) that if they fail to include in their collective agreement an arbitration provision, then the statutory provision in subs.(2) will form part of their agreement, subject in proper cases to modification of the provision by the Labour Relations Board, and (b) that if they fail to appoint an arbitrator or to constitute a Board of Arbitration, the necessary appointments will be made by the Minister of Labour.

With respect, it seems to me that the element and degree of compulsion inherent in the Labour Relations Act regarding arbitration of industrial disputes establishes the instant Board of Arbitration as a statutory Board. If this be so, then admittedly certiorari may issue to it from this Court.

61 The Act in this case also establishes a process which involves a level of compulsion. The system of adjudication established by Division 2 of the Act, and for review adjudication established by Division 2A, provides a singular statutory mechanism for resolution of a disputes as to payment claims made under the Act. There is to be no contracting out of the requirements of the Act or any of the procedures established under the Act: s.48.

62 The process includes the following features:

(a) an adjudication application must be made to an authorised nominating authority: s.18(3)(b);

(b) the nominating authority which selects and appoints adjudicators is a public statutory body authorised by the Building Commission: s.42 and s.47B;

(c) it is the duty of an authorised nominating authority to which an adjudication application is made to refer the application to an adjudicator as soon as practicable: s.18(7);

(d) following an adjudication determination, the respondent is required to pay any adjudicated amount: s.28M;

(e) payment must also be made following a review determination: s.28N;

(f) an unpaid claimant has a statutory entitlement to suspend the carrying out construction work under the construction contract or to suspend supplying related goods and services under the construction contract: s.28O; and

(g) an unpaid claimant may recover as a debt due to that person, in any court of competent jurisdiction, the unpaid portion of the amount payable following the delivery of a payment claim (where no payment schedule is delivered by a respondent disputing the claim) under s.16, or under s.28M or s.28N and s.28R if there has been an adjudication or a review adjudication.

63 In addition, the Act provides a further facility for the claimant to be paid, by conferring upon a claimant a statutory assignment or “garnishee” of monies which may otherwise be payable by a principal to the respondent under a relevant construction contract. Upon a judgement being entered in favour of a claimant in accordance with s.28R, an unpaid claimant may make application to the court for a debt certificate: s.33; upon serving a payment claim on the principal in the prescribed form, which includes the debt certificate, a statutory assignment of sums due from the principal to the respondent in favour of the claimant is created: s.32 and s.34; with the statutory assignment ranking in favour of a claimant who serves the principal first in time: s.36.

64 These methods of enforcement are in addition to other avenues which are open under the Act to assist an unpaid claimant. Having first served a notice of intention in the prescribed form, the claimant may exercise a lien in respect of any unpaid amount of a progress payment over any unfixed plant or materials supplied by the claimant in connection with the carrying out of construction work for the respondent: s.12A. The Act also provides a statutory facility for the claimant to suspend its works if an adjudicated amount has not been paid: s.28O (1)(b).

65 An adjudicator appointed under the Act is a statutory arbitrator of the type referred to by Lord Goddard CJ in the Dental Technicians case and, pursuant to the statute, is one to whom the parties must resort if there is a dispute as to a progress claim made under the legislation. On this analysis, an adjudicator is not a private body, and the application of certiorari cannot be excluded on this ground.

A Private Body Performing a Public Function

66 If I am wrong in arriving at this conclusion, even in the case of a body which is private in nature, yet has legal authority to determine questions affecting the rights or obligations of individuals, certiorari may nevertheless have application if the private body exercises its powers in the performance of a public duty.

67 R v Panel for Take-overs and Mergers, ex parte Datafin plc (“Datafin”) is a landmark case on point. It is of significance because it established that the decisions of a private body exercising public functions may be amenable to judicial review . The Panel on Take-overs and Mergers (the “Take-overs Panel”) was London’s self-regulating mechanism for dealing with mergers and acquisitions . The applicants complained to the Take-overs Panel about the conduct of their competitors in a take-over bid. The Panel made a decision in the matter which was adverse to the applicants. When they were refused leave to seek judicial review of the Take-overs Panel decision by the High Court , they appealed to the Court of Appeal . Sir John Donaldson MR, in emphasising that the Take-overs Panel was a private body, described it in the following terms:

The Panel on Take-overs and Mergers is a truly remarkable body. Perched on the 20th floor of the Stock Exchange building in the City of London, both literally and metaphorically it oversees and regulates a very important part of the United Kingdom financial market. Yet it performs this function without visible means of legal support.

68 The Master of the Rolls then proceeded to develop his point. He observed that the Panel was an unincorporated association without legal personality consisting of about 12 members. Those members were appointed by and represented a group of financial organisations. The Panel had no statutory, prerogative or common law powers and was not in contractual relationship with participants in the financial market or with those who deal in that market. The City Code on Take-overs and Mergers, which it applied in its determinations did not have the force of law, although it purported to set standards of conduct for those who wished to take advantage of the facilities of the securities markets in the United Kingdom in matters relating to Take-overs. The Take-overs Panel was a self-regulating body in the latter sense.

69 Nevertheless, although lacking any authority de jure, the Panel did exercise considerable power de facto by devising, promulgating, amending and interpreting the City Code on Take-overs and Mergers, by waiving or modifying the application of the code in particular circumstances, by investigating and reporting on alleged breaches of the code and by the application or threat of sanctions.

70 Further, the rulings generated in its Panel 20th floor London premises were not without legal consequence. The findings made by the Take-overs Panel were open to be enforced and applied by other statutory bodies to penalise transgressors. Thus, for example, rr.22 to 24 of the Stock Exchange Rules provided for severe penalties, up to and including expulsion, for acts of misconduct, and by r.23.1 provided:

Acts of misconduct may consist of any of the following ... (g) Any action which has been found by the Panel on Take-overs and Mergers (including where reference has been made to it, the Appeal Committee of the Panel) to have been in breach of The City Code on Take-overs and Mergers. The findings of the Panel, subject to any modification by the Appeal Committee of the Panel, shall not be re-opened in proceedings taken under Rules 22 to 24.

71 Reference was made by the Master of the Rolls in Datafin to Czarnikow v Roth Schmidt & Co. This was a case concerning the validity of a contractual clause which sought to oust the jurisdiction of the court, and, although the proposition has been significantly modified in contemporary case-law, the colourful observation of Scrutton LJ was thought to have general application:

In my view to allow English citizens to agree to exclude this safeguard for the administration of the law is contrary to public policy. There must be no Alsatias in England where the King's writ does not run.

72 The Court of Appeal in Datafin then proceeded to apply the relevant case law of the United Kingdom. The Master of the Rolls described R v Criminal Injuries Compensation Board, ex p Lain in the following terms:

Lord Parker CJ, who had unrivalled experience of the prerogative remedies both on the Bench and at the Bar, said that the exact limits of the ancient remedy of certiorari had never been and ought not to be specifically defined. I respectfully agree and will not attempt such an exercise. He continued:

‘They have varied from time to time, being extended to meet changing conditions. At one time the writ only went to an inferior court. Later its ambit was extended to statutory tribunals determining a lis inter partes. Later again it extended to cases where there was no lis in the strict sense of the word, but where immediate or subsequent rights of a citizen were affected. The only constant limits throughout were that the body concerned was under a duty to act judicially and that it was performing a public duty. Private or domestic tribunals have always been outside the scope of certiorari since their authority is derived solely from contract, that is from the agreement of the parties concerned ... We have, as it seems to me, reached the position when the ambit of certiorari can be said to cover every case in which a body of persons, of a public as opposed to a purely private or domestic character, has to determine matters affecting subjects provided always that it has a duty to act judicially. Looked at in this way the board in my judgment comes fairly and squarely within the jurisdiction of this court. The board are, as counsel for the board said, "a servant of the Crown charged by the Crown, by executive instruction, with the duty of distributing the bounty of the Crown". The board are clearly, therefore, performing public duties.'

Diplock LJ, who was later to make administ rative law almost his own, said:

The jurisdiction of the High Court as successor of the court of Queen's Bench to supervise the exercise of their jurisdiction by inferior tribunals has not in the past been dependent on the source of the tribunal's authority to decide issues submitted to its determination, except where such authority is derived solely from agreement of parties to the determination. The latter case falls within the field of private contract and thus within the ordinary civil jurisdiction of the High Court supplemented where appropriate by its statutory jurisdiction under the Arbitration Acts.

The earlier history of the writ of certiorari shows that it was issued to courts whose authority was derived from the prerogative, from royal charter, from franchise or custom, as well as from Act of Parliament. Its recent history shows that as new kinds of tribunals have been created, orders of certiorari have been extended to them too and to all persons who under authority of government have exercised quasi-judicial functions. True, since the victory of Parliament in the constitutional struggles of the seventeenth century, authority has been generally if not invariably conferred on new kinds of tribunals by or under Act of Parliament and there has been no recent occasion for the High Court to exercise supervisory jurisdiction over persons whose ultimate authority to decide matters is derived from any other source.

I see no other reason, however, for holding that the ancient jurisdiction of the court of Queen's Bench has been narrowed merely because there had been no occasion to exercise it. If new tribunals are established by acts of government, the supervisory jurisdiction of the High Court extends to them if they possess the essential characteristics on which the subjection of inferior tribunals to the supervisory control of the High Court is based. What are these characteristics? It is plain on the authorities that the tribunal need not be one whose determinations give rise directly to any legally enforceable right or liability. Its determination may be subject to certiorari notwithstanding that it is merely one step in a process which may have the result of altering the legal rights or liabilities of a person to whom it relates.

It is not even essential that the determination must have that result, for there may be some subsequent condition to be satisfied before the determination can have any effect on such legal rights or liabilities. That subsequent condition may be a later determination by another tribunal (see R. v. Postmaster General, Ex p. Carmichael ([1928] 1 KB 291) R. v. Boycott, Ex p. Keasley ([1939] 2 All ER 626, [1939] 2 KB 651)). Is there any reason in principle why certiorari should not lie in respect of a determination where the subsequent condition which must be satisfied before it can affect any legal rights or liabilities of a person to whom it relates, is the exercise in favour of that person of an executive discretion as distinct from a discretion which is required to be exercised judicially?

73 Sir John Donaldson MR continued:

In all the reports it is possible to find enumerations of factors giving rise to the jurisdiction, but it is a fatal error to regard the presence of all those factors as essential or as being exclusive of other factors. Possibly the only essential elements are what can be described as a public element, which can take many different forms, and the exclusion from the jurisdiction of bodies whose sole source of power is a consensual submission to its jurisdiction.

In fact, given its novelty, the panel fits surprisingly well into the format which this Court had in mind in R v Criminal Injuries Compensation Board . It is without doubt performing a public duty and an important one.

74 Thus on the authority of Datafin, decisions of a private body exercising public functions may be amenable to judicial review . The Court of Appeal held that the powers exercised by the Take-overs Panel were essentially in the domain of public law and formed part of the Government's scheme to regulate the conduct of Take-overs in the market. It was thus performing part of the regulatory functions of government. Those affected had no choice but to submit to the Panel's jurisdiction. Consequently, the Panel had the duty to act judicially and its decisions could be checked by means of judicial review, including application of the remedy of certiorari. On the facts however, the Court of Appeal found that the grounds relied upon to quash the disputed decision had not been made out.

75 Datafin has been considered in Australia. In Victoria, for example, the Full Court approved and applied it in State of Victoria v The Master Builders’ Association of Victoria. In New South Wales it received attention in Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd (FICS) and Julie Wong (No. 2), where the trial Judge, Shaw J, in the course of finding that the FICS, although a private body, was empowered to make decisions of a public character, made the following observations:

In my view, the preponderance of Australian authority indicates that the English case of R v Panel on Take-overs and Mergers; Ex parte Datafin Plc [1987] QB 815 is applicable in this country, that is to say that companies administering external complaints schemes concerning participants in the finance industry are judicially reviewable. As Hoffman LJ said in relation to structures analogous with FICS in R v Disciplinary Committee of Jockey Club; Ex parte Aga Khan [1992] EWCA Civ 7 ; [1992] EWCA Civ 7 ; [1993] 2 All ER 853 ; [1993] 1 WLR 909 at 931 at 931: “What one has here is a privatisation of the business of government itself”.

Reasoning by analogy, Australian cases indicate the public character of bodies comparable to FICS; this is so in relation to the Advertising Standards Council: Typing Centre of New South Wales v Toose (unreported, 15 December 1998, SCNSW) per Matthews J; Dorf Industries Pty Ltd & Box Emery & Partners (a firm) v The Honourable P B Toose CBE QC (1994) 54 FCR 350 , (1994) 127 ALR 654 at 664-666 per Ryan J; McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470 ; (2002) 191 ALR 759 [115]-[117] at 790-791 per Campbell J. Thus, it seems to me clear that the Datafin principle applies in New South Wales, that FICS was exercising powers of a public nature, and this is susceptible to judicial review.

76 An adjudication conducted under the Act has some elements which suggest that the process involves the exercise of powers of a private as opposed to powers of a public kind:

(a) An adjudicator is a private individual nominated by an authorised nominating authority. An authorised nominating authority is a person authorised by the Building Commission established under the Building Act 1993 . Although it is conceivable that a governmental body could be authorised to act as a nominating authority, there is no requirement in the Act that this be the case. Private individuals and incorporated bodies may certainly be so authorised, as was the case in the present matter where Adjudicate Today Pty Ltd was engaged as the nominating authority.

(b) Pursuant to s.42 of the Act, the nominating authority is empowered to nominate persons to determine adjudication applications. Section 19(1) of the Act provides that a person is eligible to be an adjudicator if the person is a natural person and “if the person has any qualifications, expertise and experience that may be prescribed for the purposes of this section”. Again, although it is conceivable that an employee of government could be nominated to act as an adjudicator, there is no requirement in the Act that this be so. Indeed the facility provided for in the Act for the parties to pay the fees of an adjudicator suggest that the engagement of private individuals is intended. In this case both the adjudicator, O’Brien, and the review adjudicator, Davenport, were private individuals.

(c) The processes prescribed by the Act provide a statutory overlay to facilitate the payment of progress payments provided for in private contracts. The well-spring of the jurisdiction of an adjudicator under the Act is the service of a payment claim pursuant to s.14 on a “person who, under the construction contract concerned, is or may be liable to make payment” under that contract. Where there is a dispute as to the entitlement of a claimant to a progress claim under the contract, the Act provides a process for the determination of that dispute and a means to enforce the outcome. As such, the Act provides a facility in aid of the exercise of a private right between contracting parties.

(d) An adjudicator is privately engaged by the parties to undertake the adjudication. The parties to an adjudication are jointly and severally responsible for the payment of the adjudicator’s fees and expenses: s.45(3). Further, pursuant to s.45(4) as between themselves, the claimant and respondent are each liable to contribute to the adjudicator's fees and expenses in equal proportions or in such proportions as the adjudicator may determine.

77 Nevertheless, one of the proper functions of government, particularly those of State governments, is regulation of the building industry, including making provision for the resolution of disputes within that industry. This function is reflected in key pieces of legislation which operate in Victoria, including the Building Act 1993 (as amended) and the Domestic Building Contracts Act 1995 . One of the purposes of the Building Act is to provide an efficient and effective system for resolving building disputes, and one of the purposes of the Domestic Building Contracts Act is to provide for the resolution of domestic building disputes and other matters by the Victorian Civil and Administrative Tribunal.

78 In a similar mould, the means by which the Act is designed to ensure that a person is able to recover a progress payment under a construction contract is by the establishment of a procedure which includes the referral of any disputed claim to an adjudicator for determination. The appointment, powers and duties of an adjudicator under the Act have their source in, and are regulated by, the statute. In this respect, the public function of an adjudicator appointed under the Act is more strongly emphasised than in the case of the Take-overs Panel in Datafin.

79 Although it could not be said that an adjudicator appointed under the Act is directly exercising “governmental power” in the sense that he or she is exercising an executive or regulatory function on behalf of the State, an adjudication conducted under the Act nevertheless involves the exercise of statutory power in a quasi judicial capacity in furtherance of one of the proper functions of government, undertaken within the legislative framework provided for.

80 Of significance is the fact that the determinations of an adjudicator, whether made at first instance or on a review adjudication, are the subject of direct statutory enforcement procedures which have the force of law, as earlier described. Again the position of an adjudicator as a public body is stronger than the position of the Take-overs Panel in Datafin.

81 Accordingly, after considering the functions of an adjudicator, even on the analysis that an adjudicator is a private body, certiorari will nevertheless have application to his or her determinations because an appointee under the Act performs functions of a public nature.

Is an Implied Ouster of Certiorari Precluded by the Victorian Constitution?

82 In Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd, I expressed the view in obiter dicta, that unlike the position in New South Wales, as determined by the New South Wales Court of Appeal in Brodyn Pty Ltd v Davenport, certiorari was available to impugn the decision of an adjudicator appointed under the Act in Victoria.

83 However, Mr Digby QC, who appeared with Mr Andrew for PCJV, contended that, contrary to my view expressed in Hickory, certiorari was not available in Victoria to impugn the decisions of adjudicators made under the Act. In putting this submission he invited me to follow the Court of Appeal in New South Wales in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor (“Brodyn”).

84 Having considered the arguments advanced by PCJV in this matter, I remain content to adopt what I said earlier in Hickory on the matter. For completeness, the reasoning is set out below.

85 In Brodyn, the Court of Appeal determined that Musico v Davenport and cases which followed it, such as Abacus Funds Management v Davenport, Multiplex Constructions Pty Ltd v Luikens, and Transgrid v Walter Construction Group were incorrectly decided, insofar as they held that relief in the nature of certiorari is available to quash an adjudicator’s determination which is not void and merely voidable. It was held by the Court of Appeal in Brodyn that there is no occasion where relief in the nature of certiorari would be available and required. This was decided as a matter of construction by necessary implication from the terms of the NSW Act.

86 The reasoning of Hodgson JA in Brodyn (with whom Mason P and Giles JA agreed) is set out in eight key passages of his Honour’s judgment. The reasoning commences with the following proposition:

I agree with McDougall J [in Musico v Davenport ] that the scheme of the Act appears strongly against the availability of judicial review on the basis of non-jurisdictional error of law. The Act discloses a legislative intention to give an entitlement to progress payments, and to provide a mechanism to ensure that disputes concerning the amount of such payments are resolved with the minimum of delay.

His Honour then concludes with the following observations:

The question then is whether there is available a remedy in the nature of certiorari, in circumstances where the determination is not void by reason of defects of the kind I have been discussing [matters going to jurisdictional error]. In my opinion it is not, because the availability of certiorari in such circumstances would not accord with the legislative intention disclosed in the Act that these provisional determinations be made and given effect to with minimum delay and minimum court involvement; and because it is by no means clear that an adjudicator is a tribunal exercising governmental powers, to which the remedy in the nature of certiorari lies.

For these reasons, I disagree with the view expressed in Musico and the cases which followed it, to the extent that they hold that relief in the nature of certiorari is available to quash a determination which is not void.

87 The Court of Appeal in Brodyn held further that it was open to challenge an adjudicator’s determination only if:

(a) the basic and essential requirements of the Act for a valid determination are not satisfied;

(b) the purported determination is not a bona fide attempt to exercise the power granted under the Act; or

(c) there is a substantial denial of the measure of natural justice required under the Act.

According to Brodyn , if any of these grounds is made out, then a purported determination will be void and not merely voidable, and would therefore be amenable to relief by way of declaration or injunction. In approaching the matter in this way, it appears that the Court of Appeal did not favour the grant of certiorari, even for jurisdictional error which rendered the determination void.

88 Brodyn has continued to be followed in New South Wales. It was followed by the Court of Appeal in Transgrid v Siemens Ltd and leave to re-argue the case has been refused on a number of occasions. However, Basten JA in Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd was of the view that some aspects of the reasoning in Brodyn might require reconsideration. Rather than approaching the matter by asking whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator's determination, Basten JA approached the matter on conventional lines by asking whether the legislature has imposed an objective requirement, rather than one which the adjudicator has power to determine. On this analysis, if the pre-condition is a matter for the objective determination of the court, a court may declare the determination to be void and order injunctive relief if the pre-condition is not satisfied. On the other hand, if the power to resolve questions said to be pre-conditions to the valid exercise of power by the adjudicator are, on a proper analysis, questions for the adjudicator, a subsequently made determination may still remain a valid determination.

89 As Giles JA (with whom Santow and Tobias JJA agreed) said in Downer Construction (Australia) Pty Ltd v Energy Australia & Ors:

While Brodyn Pty Ltd v Davenport might bear elucidation, as has occurred in, for example Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd and Co-ordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd , I am not moved ... to regard it as wrong in substance, and I am not persuaded that reconsideration would expand availability of judicial review to the review for error of law or fact ... [contended for in this case]. The Act’s oft-recognised objective of speedy but interim resolution of claims, attendant with the possibility of error and confined curial intervention, in my view weighs heavily against substantive change in the current approach to challenges to determinations under the Act.

The amounts often at stake in the challenges which come before the court make an application for special leave to appeal to the High Court likely, whatever be the approach to the challenges determined in this Court. For the reasons stated above, I consider that the circumstances of this case do not warrant the grant of leave to re-argue Brodyn v Davenport ; and more widely, I favour maintaining Brodyn Pty Ltd v Davenport until the High Court says otherwise.

90 In John Holland Pty Ltd v Roads and Traffic Authority of NSW Hodgson JA summarised the effect of Brodyn as being that although there was not, in the New South Wales Act, an explicit exclusion of the jurisdiction of the court by a privative clause, an intention was disclosed by the NSW Act to exclude intervention for errors of law or other errors short of errors causing invalidity. Basten JA, on the other hand reiterated his previously expressed view, and decided the case on the basis that the power to resolve the questions said to be pre-conditions to the valid exercise of power by the adjudicator in that case were, on a proper analysis, questions for the adjudicator and not for the objective determination of the court. His Honour said:

So long as it is part of the function of the adjudicator to determine such matters and so long as it is within the power of the adjudicator to act in accordance with his own determination, even if a court might have reached a different conclusion, there is no basis for saying that the adjudication was invalid.

As I sought to explain in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229 at [43] - [48] , in my view the power to resolve these questions has been conferred on the adjudicator.

91 As was observed in Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd, the statements of law enunciated in Brodyn, as applied to the NSW Act, are in substance persuasive. If the NSW Act and its Victorian counterpart are to achieve their objectives in providing for the speedy resolution of progress claims, displacing conventional curial intervention may be seen as a necessary sacrifice. Further, in the context of national building operations being conducted in this country, it is desirable that there be consistency in the regimes for payment under construction contracts in both jurisdictions, particularly where common legislative schemes are in place.

92 However, it does not follow from these observations that the principles stated in Brodyn, to which I have referred, can or should be adopted in Victoria, and in significant part, I find myself unable to do so. I am compelled to this course having undertaken a close examination of the Victorian Act and by application of relevant provisions of the Victorian Constitution reflected in the Constitution Act 1975.

93 In Brodyn, the view was taken in relation to the NSW Act that, although there was not an explicit exclusion of the jurisdiction of the Court prior to the obtaining of judgment, an intention was disclosed to exclude curial intervention for errors of law in the adjudicator’s determination. It followed that, under the NSW Act properly construed, relief in the nature of certiorari was not available to quash an adjudicator’s determination which is not void and merely voidable.

94 In my opinion, this construction is not open under the Victorian Act.

95 The fundamental issue of construction of the Victorian Act in this context arises from the application of the Constitution Act 1975 (Vic), insofar as it makes provision for the powers and jurisdiction of the Supreme Court. Section 85 of the Constitution Act relevantly provides by subsections (1), (5) and (6):

(1) Subject to this Act the Court shall have jurisdiction in or in relation to Victoria its dependencies and the areas adjacent thereto in all cases whatsoever and shall be the superior Court of Victoria with unlimited jurisdiction.

...

(5) A provision of an Act, other than a provision which directly repeals or directly amends any part of this section, is not to be taken to repeal, alter or vary this section unless –

(a) the Act expressly refers to this section in, or in relation to, that provision and expressly, and not merely by implication, states an intention to repeal, alter or vary this section; and

(b) the member of the Parliament who introduces the Bill for the Act or, if the provision is inserted in the Act by another Act, the Bill for that other Act, or a person acting on his or her behalf, makes a statement to the Council or the Assembly, as the case requires, of the reasons for repealing, altering or varying this section; and

(c) the statement is so made –

(i) during the member's second reading speech; or

(ii) after not less than 24 hours' notice is given of the intention to make the statement but before the third reading of the Bill; or

(iii) with the leave of the Council or the Assembly, as the case requires, at any time before the third reading of the Bill.

(6) A provision of a Bill which excludes or restricts, or purports to exclude or restrict, judicial review by the Court of a decision of another court, tribunal, body or person is to be taken to repeal, alter or vary this section and to be of no effect unless the requirements of subsection (5) are satisfied.

96 The Victorian Act expressly refers to s.85 of the Constitution Act in relation to two of its provisions. Section 51 of the Act provides for the constitutional s.85(5)(a) references as follows:

(1) It is the intention of section 46 [relating to immunity afforded to an adjudicator] to alter or vary section 85 of the Constitution Act 1975 .

(2) It is the intention of section 28R [which includes the privation clause in s.28(5) ] to alter or vary section 85 of the Constitution Act 1975 .

97 Critically, there is no reference in the Act to altering or varying s.85 of the Constitution Act in relation to any other matter, including the grant of relief by way of certiorari. It follows, in my opinion, that no implication can arise in construing the Act which has this effect. Indeed it could be said that the implication operates in the opposite direction. Having specifically turned its mind to the matter of which provisions in the Act should operate to limit the jurisdiction of the Supreme Court under the Constitution Act, it appears to have been the intention of the Legislature not to limit the Court’s jurisdiction by excluding or restricting judicial review by the Court of a determination of an adjudicator under the Act.

98 I am also mindful of reluctance of the Courts to impute to the legislature an intention to curtail fundamental rights in the absence of “clear and unmistakable language”. As Gleeson CJ put it in Plaintiff S157/2002 v Commonwealth of Australia, a case in which the High Court considered the effectiveness of a privative clause in the Commonwealth Migration Act 1958 :

... courts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose. What courts will look for is a clear indication that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment: Coco v R [1994] HCA 15 ; (1994) 179 CLR 427. As Lord Hoffmann recently pointed out in the United Kingdom ( R v Home Secretary; Ex parte Simms [1999] UKHL 33 ; [2000] 2 AC 115) , for parliament squarely to confront such an issue may involve a political cost, but in the absence of express language or necessary implication, even the most general words are taken to be “subject to the basic rights of the individual: Annetts v McCann [1990] HCA 57 ; (1990) 170 CLR 596.

99 In Victoria, to take the step of limiting the reach of the prerogative writ of certiorari, by implying into the Act a restriction that it is not intended to apply to voidable errors of law on the face of the record found in the determinations of adjudicators, would exclude or restrict to that extent, judicial review by the Court of such determinations. The necessary procedures not having been followed, as demonstrated by the absence in the Act of any s.85(5)(a) reference to the matter, would result in a contravention of s.85(6) of the Constitution Act and for this reason the implication is not open.

100 I am compelled to arrive at this conclusion in spite of powerful countervailing factors such as those addressed by the Court of Appeal in Brodyn. Further, the considerations raised by Palmer J in Multiplex Constructions Pty Ltd v Luikens and Anor, are of weight, particularly where his Honour made the observation that:

The Courts recognise that a legislative intention to abrogate such rights does not always have to be explicit: such an intention may be found in legislation “by necessary implication” : see Annetts v McCann [1990] HCA 57 ; (1990) 170 CLR 596 , at 599; Public Service Association (SA) v Federated Clerks Union of Australia [1991] HCA 33 ; (1991) 173 CLR 132 , at 160 per Dawson and Gaudron JJ; Darling Casino at 633 per Gaudron and Gummow JJ.

101 In my opinion, the only way to correct the position in Victoria, if the legislature saw fit to do so in order to reinforce the purposes and objects of the Act and provide for desirable uniformity with similar interstate legislation, is by passing an act of Parliament which properly addresses s.85 of the Constitution Act 1975.

102 For the reasons which I have expressed, in my opinion, relief in the nature of certiorari, on all of the grounds available under the writ, including error on the face of the record, is not excluded either expressly or by implication under the Act in Victoria. The prerogative writ may be invoked in relation to the determination of an adjudicator under the Victorian Act where is it open to do so. In this respect, I am unable to follow Brodyn.

Jurisdictional Error

103 A ground of judicial review advanced by  Grocon  was that the determinations of the adjudicators in each case were subject to jurisdictional error and that, on this basis, certiorari should be invoked to quash the determinations, subject to the exercise of the Court’s discretion.

104 As to jurisdictional error, the High Court in Craig drew a distinction between the considerations which apply to an inferior court within the court hierarchy, and an administrative tribunal. An error of law on the part of an inferior court will only amount to a jurisdictional error in the limited circumstances described in Craig. On the other hand, an administrative tribunal will commit a jurisdictional error in a broader range of circumstances. As th e High Court said:

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.

105 It is to be noted from this passage in Craig, that a critical element in arriving at a jurisdictional error on the part of an administrative tribunal is that the exercise or purported exercise of the conferred power was affected as a result of the error.

106 Nevertheless, whether or not a jurisdictional error has arisen, which is founded on a finding of a fact, will depend upon the construction of the enabling enactment. As Phillips JA observed in The Returned & Services League of Australia (Victoria Branch) v Liquor Licensing Commission:

In short, it seems to me that, though critical in some cases (as was recognised by the High Court in Craig at 179), the distinction between a court of law and a true administrative tribunal is essentially of importance only if and in so far as the nature of the one or the other sheds any light on deciding the intention of the Parliament in committing the task at stake to the body in question - and in particular whether that task includes not only the power to decide but also the power to decide wrongly (and whether on questions of fact or law) without attracting prerogative relief: compare Newcastle Wallsend Coal Co Pty Ltd v Court of Coal Mines Regulation (1997) 42 N.S.W.L.R. 351 at 386-7, contrast 390-1.

And further:

It is just that on questions of fact it is perhaps even less likely that the body in question will have strayed outside its jurisdiction. Administrative tribunals are commonly charged with determination of the facts (as of course are courts) and error in making a decision in that regard is less likely to attract certiorari for jurisdictional error. That is not to say that error of fact may not in certain circumstances amount to jurisdictional error; it may. For example error on a question of fact will go to jurisdiction if the jurisdiction of the tribunal is conditioned upon some event's having occurred, as distinct from the tribunal's deciding, rightly or wrongly, that it has occurred. In the former case, the tribunal will have exceeded its jurisdiction if it proceeds otherwise than after the event has actually occurred: for example, Potter v Melbourne and Metropolitan Tramways Board [1957] HCA 43 ; (1957) 98 CLR 337. It is otherwise if the tribunal has had conferred upon it the jurisdiction to proceed after deciding that the event has occurred and thus irrespective of whether its decision on the fact was right or wrong. Such error may be open to correction on appeal (if an appeal lies) but it is not jurisdictional error. Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7 ; (1938) 59 CLR 369 at 388-9 per Dixon J, R v. Blakeney, ex parte Association of Architects etc. of Australia [1950] HCA 40 ; (1950) 82 CLR 54 at 57-8.

Whether the question decided below has been one of fact or law, where the body in question, be it administrative tribunal or court of law, is authorised to decide the question without being guilty of jurisdictional error if it decides wrongly, the body will sometimes be described as having the power (or the jurisdiction) to decide "conclusively" or "authoritatively" (not meaning to exclude any right of appeal that may exist but meaning that the tribunal, even if it errs in deciding, still stays within its jurisdiction). Sometimes it will be described more vividly as having the power, or the jurisdiction, not only to go right but also to go wrong: R v Governor of Brixton Prison, Ex parte Armah [1968] AC 192 at 234 per Lord Reid (revisited by his Lordship in Anisminic Ltd v Foreign Compensation Commission [1968] UKHL 6 ; [1969] 2 AC 147 at 171), Parisienne at 374, 375, per Latham CJ. But whatever description is given it, the duty of the supervising court will be to determine whether the power of the decision-making body is as I have just described (in which case prerogative relief will not go) or is not so extensive as to exclude such relief

107 Accordingly, in the present case each of the grounds raised in the originating motion will have to be considered to determine whether all or any of them raise jurisdictional error. In the course of this analysis it will be necessary to determine whether, in each case, an adjudicator was conferred with the power under the Act to determine the facts which establish his or her jurisdiction, such that, if an adjudicator errs in deciding the jurisdictional fact, the adjudicator still stays within his or her jurisdiction.

108 In approaching the construction of the Act the intention, purposes and object of the legislation must be considered. As Phillips JA said in Returned & Services League of Australia: “

The essential search must be for the task which is confided to the body whose decisions are under attack; for only if that body strays beyond that task will there be a want or excess of jurisdiction.

109 The issue was succinctly identified by Dixon J in Parisienne Basket Shoes Pty Ltd v Whyte in discussing jurisdictional pre-conditions which may apply to a court:

It cannot be denied that, if the legislature see fit to do it, any event or fact or circumstance whatever may be made a condition upon the occurrence or existence of which the jurisdiction of a court shall depend. But, if the legislature does make the jurisdiction of a court contingent upon the actual existence of a state of facts, as distinguished from the court's opinion or determination that the facts do exist, then the validity of the proceedings and orders must always remain an outstanding question until some other court or tribunal, possessing power to determine that question, decides that the requisite state of facts in truth existed and the proceedings of the court were valid. Conceding the abstract possibility of the legislature adopting such a course, nevertheless it produces so inconvenient a result that no enactment dealing with proceedings in any of the ordinary courts of justice should receive such an interpretation unless the intention is clearly expressed.

110 In undertaking this exercise I take into account that the main purpose of the Act is to ensure that any person who carries out construction work, or provides related goods or services, is able to promptly recover progress payments. To advance that purpose, the Act sets up a unique form of adjudication of disputes over the amount due for a claimed progress payment. Parliament intended that a progress payment, on account, should be made promptly and that any disputes over the amount finally due should be decided in separate proceedings, either by a court or by an agreed dispute resolution procedure. But meanwhile the claimant’s entitlement, if in dispute, would be decided on an interim basis by an adjudicator, and that interim entitlement would be paid.

111 For this reason the Act preserves the right of a claimant or a respondent to commence proceedings under the relevant construction contract, including proceedings in a court, arbitration proceedings or other dispute resolution process: s.47(2). Further, in any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal is required to make allowance for any sum paid pursuant to the Act in any order which is made: s.47(3)(a); and may make appropriate orders for the restitution of any amount paid under the Act on the interim basis provided for: s.47(3)(b). Thus no res judicata or issue estoppel is created by reason of an adjudicator’s determination.

112 As I said in Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor:

The Act also manifests another central aspiration, that of freedom from excessive legal formality. The provisions demonstrate a pragmatic concern to provide a dispute resolution process which is not bedeviled with unnecessary technicality. The Building and Construction Industry Security of Payment Act 1999 (NSW) has led to a spate of litigation in its relatively short life. If the Victorian Act became prone to challenges founded on fine legal points, an important object of the Act would be defeated by the twin adversaries of cost and time. [Footnote omitted]

113 Another facility provided by the Act which is also of significance in this context is that a claimant for a progress payment may suspend the carrying out of construction work upon giving 3 business days notice to the respondent: s.29. This may only occur if the respondent does not pay the claimant in response to a payment claim and does not deliver a payment schedule: s.16(2)(b); if the respondent does not pay the claimant the amount specified in any a payment schedule which is given: s.17(2)(b); or, if the respondent does not pay the claimant the sum which is adjudicated to be payable pursuant to the determination of an appointed adjudicator: s.28O(1)(b). The Act further provides that a suspension undertaken in accordance with s.29 does not constitute a breach of contract: s.29(3). The remedy provided by s.29 for the contractor to suspend works in the circumstances described is a powerful tool in the enforcement of the scheme of the Act. However, the decision to exercise the right to suspend is critically dependent on the validity of the payment claim being made for the purposes of ss.16 and 17, and the validity of an adjudicator’s determination for the purposes of s.28O. A contractor would be seriously inhibited in the exercise of its statutory right to suspend works if it suspected that its payment claim and the adjudicator’s determination made upon it could be vulnerable to attack on technical legal grounds. If the contractor made the wrong call, the consequences of suspending work could be prohibitive.

114 Reference may be made to the observations of Einstein J in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport where his Honour said in relation to the similar New South Wales legislation:

What the legislature has effectively achieved is a fast track interim progress payment adjudication vehicle. That vehicle must necessarily give rise to many adjudication determinations which will simply be incorrect. That is because the adjudicator in some instances cannot possibly, in the time available and in which the determination is to be brought down, give the type of care and attention to the dispute capable of being provided upon a full curial hearing. It is also because of the constraints imposed upon the adjudicator by section 21, and in particular by section 21(4A) denying the parties any legal representation at any conference which may be called. But primarily it is because the nature and range of issues legitimate to be raised, particularly in the case of large construction contracts, are such that it often could simply never be expected that the adjudicator would produce the correct decision. What the legislature has provided for is no more or no less than an interim quick solution to progress payment disputes which solution critically does not determine the parties’ rights inter se. Those rights may be determined by curial proceedings, the Court then having available to it the usual range of relief, most importantly including the right to a proprietor to claw back progress payments which it had been forced to make through the adjudication determination procedures. That clawback route expressly includes the making of restitution orders. (Italics in original).

115 With the exception of the case where the basic and essential requirements of the Act for a valid determination are not satisfied, or where the purported determination is not a bona fide attempt to exercise the power granted under the Act, if the Act does make the jurisdiction of an adjudicator contingent upon the actual existence of a state of facts, as distinguished from the adjudicator’s determination that the facts do exist to confer jurisdiction, in my opinion the legislation would not work as it was intended to. Unnecessary challenges to the jurisdiction of an adjudicator appointed under the Act would expose the procedures to delay, cost and expense. The very purpose of the Act would be compromised.

116 For these reasons, in my opinion, in order to serve the purposes of the Act, the intention of the legislation is to confer upon an adjudicator the capacity to determine facts which go to his or her jurisdiction, subject to exceptions of the type to which I have referred. It follows that, in making those determinations, the Act confers on adjudicators jurisdiction to make an incorrect decision in relation to such jurisdictional facts which will not be overturned by certiorari.

117 I will approach the assessment of the jurisdictional challenges to the determination of the adjudicators made in this case with these factors in mind.

Error of the Face of the Record

The Principles

118 A further ground of judicial review pressed by  Grocon  was that the determinations of the adjudicators in each case evidenced errors on the face of the record in respect of which certiorari will lie. If the ground is made out, subject to discretionary considerations, the determinations, or one or other of them, could be quashed.

119 In Re McBain; Ex parte Australian Catholic Bishops Conference, Hayne J observed:

... the granting relief for error on the face of the record has been seen as anomalous.

The anomaly lies in the distinction (not always easy to draw) between jurisdictional and non-jurisdictional error. In the former kind of case, public power is exercised unlawfully, in the latter it is exercised mistakenly but lawfully. The constitutional writs and, save for certiorari to quash for error on the face of the record, all other prerogative and like remedies, are concerned with the former, not the latter. And if error of law can ground relief, why not error of fact? To allow certiorari as a remedy for the correction of some but not all errors is, therefore, anomalous. To do so in cases where there is a general power of appeal for the correction of all errors may be thought not just anomalous but unnecessary. It is, then, not surprising that the principles governing the grant of certiorari in the United States have developed as they have.

120 Although the line between jurisdictional error and mere error in the exercise of jurisdiction, being an error on the face of the record, may be difficult to discern, and there may be room for overlap in the concepts as they may be applied in particular cases, an error on the face of the record is not the same as a jurisdictional error. As Cavanough J observed in Wilson v County Court & Anor:

Error of law on the face of the record is not a species of jurisdictional error. It is a distinct ground of review.

Further, as observed by his Honour in Wilson:

There is no need to distinguish between inferior courts and tribunals as to the circumstances in which errors of law on the face of the record will be reviewable.

121 In relation to error of law on the face of the record, the High Court in Craig indicated that it is enough if the impugned order or decision be "affected" by "some" error of law that is disclosed by the record for certiorari to operate. As noted by Cavanough J in Wilson:

The High Court [did not] say or imply that an error of law on the face of the record needed to be “fundamental” (in any sense).

A material non trivial error revealed on the face of the record may constitute an error which will attract relief in the nature of certiorari, subject to discretionary factors. Further, in Wilson his Honour quoted with approval the observations made by members of the High Court in Australian Broadcasting Tribunal v Bond , in which Mason CJ said:

A decision does not “involve” an error of law unless the error is material to the decision in the sense that it contributes to it so that, but for the error, the decision would have been, or might have been, different.

Toohey and Gaudron JJ also said in the same case:

For an error of law to be involved in a decision something more than the mere occurrence of error is necessary. The error must have contributed to the decision in some way or, at the very least, it must be impossible to say that it did not so contribute. Conversely, an error is not involved in a decision if it did not contribute to the decision or if the decision must have been the same regardless of the error. Thus, to show that an error of law is involved in a decision it is necessary, at the very least, to show that the decision may have been different if the error had not occurred.

Errors of Fact

122 Much of the attack made by  Grocon  on the determinations of the adjudicators in this case was founded on alleged errors of fact.

123 The question as to whether the evidence before a tribunal may be examined on judicial review on the ground of error of law on the face of the record has received judicial attention in Australia. It is settled that the question as to whether there is any evidence of a fact is a question of law. Thus, in the context of judicial review, it has been accepted that the question whether there is any evidence of a particular fact is a question of law, as is the question whether a particular inference can be drawn from the facts. However, it is also the position that "(t)here is no error of law simply in making a wrong finding of fact." In Bond, Mason CJ, in the course of considering the issue, made reference to the observations of Menzies J in Reg v The District Court; Ex parte White:

Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law on the face of the record. To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law.

Mason CJ in Bond went on to conclude that:

Thus at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.

124 Batt J in Road Corporation v Dacakis cited these observations of Mason CJ in Bond with approval. Having reviewed the current state of the authorities on the point, Batt J concluded:

For the foregoing reasons, I think that I should proceed on the basis that a finding of fact will only be open to challenge as erroneous in law if there is no probative evidence to support it (and not also if it is not reasonably open on the evidence), whilst an inference will be open the challenge as being erroneous in law if it was not reasonably open on the facts.

125 In determining an adjudication application an adjudicator is obliged to consider, inter alia, the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim: s.23(2)(c); and like material provided by a respondent: s.23(2)(d).

126 The Act does not contemplate the reception of evidence which would be admissible in according to the laws of evidence in a court of law. Documentary evidence in the nature of submissions and relevant documentation is to be considered by an adjudicator.

Duty of Adjudicator to Provide Procedural Fairness (Natural Justice)

127 A further ground of judicial review pressed by  Grocon  was that the adjudicators in each case failed to afford it procedural fairness or natural justice in the conduct of the proceedings before them. Again, if this is in fact made out, the determinations of the adjudicators would be open to be quashed by the grant of relief in the nature of certiorari, subject to discretionary considerations.

128 The term procedural fairness is thought to be preferable when referring to administrative decision-making because the term natural justice tends to be associated with procedures used by courts of law. However, the terms have similar meaning and are commonly used interchangeably. For consistency, the term procedural fairness is used in these reasons.

129 In Australia, it may be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of procedural fairness regulate the exercise of that power unless they are excluded by plain words which manifest a contrary intention. This principle has also been extended to operate in private clubs and associations where the rules of those private organisations, having contractual force, are generally construed as intending to import fair procedures where a power of expulsion or the like is exercised adversely to the interests of a member, subject only to express words or necessary implication to the contrary.

130 In Annetts v McCann the majority of the High Court in that case (Mason CJ, Deane and McHugh JJ) said:

It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment: The Commissioner of Police v Tanos [1958] HCA 6 ; (1958) 98 CLR 383 , at pp 395-396; Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 , at pp 109-110; Heatley v Tasmanian Racing and Gaming Commission [1977] HCA 39 ; (1977) 137 CLR 487 , at pp 496, 500; J. v Lieschke [1987] HCA 4 ; [1987] HCA 4 ; (1987) 162 CLR 447 , at p 456; Haoucher v Minister for Immigration and Ethnic Affairs [1990] HCA 22 ; [1990] HCA 22 ; (1990) 64 ALJR 357 , at p 371; [1990] HCA 22 ; 93 ALR 51 , at p 73. In Tanos , Dixon CJ and Webb J said (at p 396) that an intention on the part of the legislature to exclude the rules of natural justice was not to be assumed nor spelled out from "indirect references, uncertain inferences or equivocal considerations". Nor is such an intention to be inferred from the presence in the statute of rights which are commensurate with some of the rules of natural justice: Baba v Parole Board of New South Wales (1986) 5 NSWLR 338 , at pp 344-345, 347, 349. In Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 , Mason J said (at p 584) that the law in relation to administrative decisions: "has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention." In Haoucher [at p 653], Deane J. said that the law seemed to him: "to be moving towards a conceptually more satisfying position where common law requirements of procedural fairness will, in the absence of a clear contrary legislative intent, be recognised as applying generally to governmental executive decision-making".

131 As to what is required by procedural fairness, this is well recognised as having a variable, or even a chameleon quality.’ As to this, Wilson J said in FAI Insurances Ltd v Winneke:

The content and application of the principles of natural justice and the obligation resting upon persons making certain decisions of an administrative nature to act fairly have been discussed at length in a number of recent decisions of this Court: Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 ; Salemi v MacKellar (No. 2) [1977] HCA 26 ; (1977) 137 CLR 396 ; Reg v MacKellar; Ex parte Ratu [1977] HCA 35 ; (1977) 137 CLR 461 ; Heatley v Tasmanian Racing and Gaming Commission [1977] HCA 39 ; [1977] HCA 39 ; (1977) 137 CLR 487 . It would be presumptuous and quite unnecessary for me to embark upon a dissertation of my own. However, I would take, with gratitude, the following brief general conspectus of the law from the judgment of Gibbs J. (as the Chief Justice then was) in Salemi (No.2) (1977) 137 CLR, at pp 419-420:

There is nothing technical about the principles of natural justice. It is sometimes said, or suggested, that those principles apply only to proceedings which are judicial, or quasi-judicial, or where there is a duty to act judicially. To state the rule in that way seems to me to be unduly restrictive and misleading. It is at least clear that when the power which is being exercised is a statutory one, it is not necessary to be able to find in the words of the statute itself a duty to hear the party affected or otherwise to act judicially. To repeat the well-known words of Byles J in Cooper v Wandsworth Board of Works [1863] EngR 424 ; (1863) 14 CB (NS) 180 , at p 194 [1863] EngR 424 ; (143 ER 414 , at p 420) , 'although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature'.

.........

The question whether the principles of natural justice must be applied, and if so what those principles require, depends on the circumstances of each case. In the case of a statutory power, the question will depend on the true construction of the statutory provision in light of the common law principles (cf. Durayappah v Fernando (1967) 2 AC, at p 350.

132 Campbell J in McLelland v Burning Palms Surf Life Saving Club summarised the position in this way:

In General Medical Council v Spakman , at 644 the expression was described as “sadly lacking in precision” . In Russell v Duke of Norfolk [1949] 1 All ER 109 at 188 Tucker LJ said:

“The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth. Accordingly I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case”.

In R v The Commonwealth Conciliation and Arbitration Commission ; ex parte The Angliss Group [1969] HCA 10 ; (1969) 122 CLR 546 , at 552 the High Court said that the common law principles of natural justice, “... are not to be found in a fixed body of rules applied inflexibly at all times and in all circumstances.” Their Honours quoted the first sentence of the passage set out above from the judgment of Tucker LJ in Russell v Duke of Norfolk, and noted that it had been approved by the Privy Council in University of Ceylon v Fernando [1960] 1 WLR 223. Their Honours also quoted from the judgment of Kitto J in Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation [1963] HCA 41 ; (1963) 113 CLR 475 , at 504, where Kitto J said:

“What the law requires in the discharge of a quasi-judicial function is judicial fairness ... what is fair in a given situation depends upon the circumstances”.

133 So what of the duty of an adjudicator appointed under the Act to afford procedural fairness?

134 PCJV relied upon the statement of McHugh J in Muin v Refugee Review Tribunal as follows:

Natural justice requires that a person whose interests are likely to be affected by an exercise of power be given an opportunity to deal with matters adverse to his or her interests that the repository of the power proposes to take into account in exercising the power.

135 This requirement can be accommodated within the processes contemplated by the Act. Section 22(5)(a) enables an adjudicator to request further submissions from either party and to give the other party an opportunity to comment on those submissions.

136 McDougall J in Musico v Davenport observed:

Where, after considering an adjudication application and an adjudication response, an adjudicator comes to the view that there was some matter, not traversed in them, that might cause him or her to deal with the application in a manner adverse to one or other party, the principle enunciated by McHugh J would ordinarily require that the adjudicator request further written submissions and comments thereon. But whether or not this principle is enlivened in a particular case must, necessarily, depend on an analysis of the “matter”, and of its significance to the determination ultimately made by the adjudicator.

137 To these observations should be added those of Brennan J in Ainsworth v Criminal Justice Commission:

Where an official entity, purportedly exercising a statutory power or performing a statutory function which requires it to observe the rules of natural justice, publishes a report damaging to a person's reputation without having given that person an opportunity to be heard on the matter, prima facie that person is entitled to a declaration that the report, so far as it damages his or her reputation, has been produced in breach of the entity's duty to observe the rules of natural justice.

138 The application of these principles must also be considered in the light of the matters an adjudicator is required to consider in determining an adjudication application provided by s. 23(2) of the Act. The list of five matters includes: the Act and the regulations: s.23(2)(a); the provisions of the relevant construction contract: s.23(2)(b); the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim: s.23(2)(c); the payment schedule (delivered by the respondent) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of its position: s.23(2)(d); and the results of any inspection undertaken s.23(2)(e). In determining the adjudication application the adjudicator is required to consider these matters only: s.23(2). Importantly, an adjudicator in determining the adjudication application “must not take into account any other matter that is prohibited by this Act from being taken into account: s.23(2A); and critically, an adjudicator’s determination is void to the extent that “it has been made in contravention of” s.23(2) or “if it takes into account any amount or matter referred to in “ s.23(2A), “to the extent that the determination is based on that amount or matter”. Like provisions apply in relation to a review determination.

139 If therefore an issue arises for consideration which is required to be determined beyond the material before the adjudicator pursuant to s.23(2), or that which can be reasonably inferred from such material, it would be incumbent on the adjudicator to seek the provision of further submissions (including relevant documentation) on the point from both parties pursuant to the adjudicator’s power to do so under s.22(5).

140 Further, in the event that it becomes necessary to make an adverse finding as to the credit of a party or a witness in order to determine an issue, as a matter of procedural fairness, if the adverse finding on credit might significantly impact upon the personal reputation of the person involved, the facility to provide further submissions under s.22(5) should be utilised.

141 This is not simply a matter of theoretical importance. A central issue between the parties which the adjudicators were compelled to determine in this case involved the question as to what constituted the relevant construction contract. It was alleged to be oral, or partly written and partly oral. Pursuant to s.4 a “construction contract” under the Act is defined to mean:

... a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party. [Emphasis added]

Further, pursuant to s.7(1) the Act applies to:

any construction contract, whether written or oral, or partly written and partly oral , and so applies even if the contract is expressed to be governed by the law of a jurisdiction other than Victoria. [Emphasis added]

142 Accordingly, applying the terms of the Act, difficult questions of fact and law of the type which arose in this case may arise for the consideration of an adjudicator. In this case, out of the two competing versions of the construction contract, a finding had to be made as to which version of the contract was to be preferred over the other.  Grocon  ’s version of events was not accepted by the adjudicator and it makes complaint that the adjudicator and the review adjudicator both failed in their duty to afford it procedural fairness in arriving at this conclusion. It remains to seen whether its case is made out in this respect.

143 Nevertheless, in approaching the question of procedural fairness in the decision making of an adjudicator under the Act, not too finer point should be taken in relation to what is done. The shortcomings of the statutory procedure provided for in the Act point to the need for a large measure of practicality, flexibility and commonsense being observed to make it work. The procedures will call for adaptation in each case in the light of the clear legislative intention of the Act, namely that adjudicator’s determinations are to be carried out informally: s.22(5A); and speedily: s.22(4); and “on the papers”: s.23 and s.28I; and bearing in mind that there is always the facility for erroneous determinations to be corrected upon a final hearing of the issues in dispute between the parties: s.47(3).

144 The legislative intention, in my opinion, points strongly to the position that, in approaching his or her task, an adjudicator’s determination will only be brought into question if there has been a substantial denial of the measure of procedural fairness required under the Act.

Function of the Court on Judicial Review

145 An application for judicial review of an adjudication determination or an adjudication review determination is not an appeal.

146 In R v Northumberland Compensation Appeal Tribunal; ex pate Shaw Denning LJ observed:

... the Court of King's Bench has an inherent jurisdiction to control all inferior tribunals, not in an appellate capacity, but in a supervisory capacity. This control extends not only to seeing that the inferior tribunals keep within their jurisdiction, but also to seeing that they observe the law. The control is exercised by means of a power to quash any determination by the tribunal which, on the face of it, offends against the law. The King's Bench does not substitute its own views for those of the tribunal, as a Court of Appeal would do.

147 The adjudicator appointed under the Act and not the Court is the body charged with the duty of evaluating the evidence and finding the facts. The role of the Court is wholly different. Its duty is to review the decision of the adjudicator and to consider whether the impugned decision should be quashed on one or more of the well recognised grounds. In an appropriate case, having found one or more of the grounds exist for quashing the decision, the Court may then proceed to exercise its discretion to so order.

148 The High Court said in Craig v South Australia:

Where available, certiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly, jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and "error of law on the face of the record". Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, the superior court entertaining an application for certiorari can, subject to applicable procedural and evidentiary rules, take account of any relevant material placed before it. In contrast, where relief is sought on the ground of error of law on the face of the record, the superior court is restricted to the "record" of the inferior court or tribunal and the writ will enable the quashing of the impugned order or decision only on the ground that it is affected by some error of law which is disclosed by that record.

149 More recently, Kirby J in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S 20/2002 said:

Regardless of the supervisory jurisdiction invoked in a particular case, judicial review is said to be limited to reviewing the legality of administrative action. Such review, ordinarily, does not enter upon a consideration of the factual merits of the individual decision. The grounds of judicial review ought not be used as a basis for a complete re-evaluation of the findings of fact, a reconsideration of the merits of the case or a re-litigation of the arguments that have been ventilated, and that failed, before the person designated as the repository of the decision-making power. [Footnotes omitted]

What Constitutes the ‘Record’ Under the Act

150 As a matter of common law, certiorari remains restricted to jurisdictional error and errors of law which appear on the “face of the record”.

151 Lord Denning in R v Northumberland Compensation Appeal Tribunal; ex pate Shaw said of the record:

It will have been seen that throughout all the cases there is one governing rule: Certiorari is only available to quash a decision for error of law if the error appears on the face of the record.

What, then, is the record? It has been said to consist of all those documents which are kept by the tribunal for a permanent memorial and testimony of their proceedings: see Blackstone's Commentaries, Vol. III, at p. 24. But it must be noted that, whenever there was any question as to what should, or should not be, included in the record of any tribunal, the Court of King's Bench used to determine it. It did it in this way: When the tribunal sent their record to the King's Bench in answer to the writ of certiorari, this return was examined, and if it was defective or incomplete it was quashed: see Apsley's case, Rex v Levermore , and Ashley's case, or, alternatively, the tribunal might be ordered to complete it: Williams v Bagot and Rex v Warnford . It appears that the Court of King's Bench always insisted that the record should contain, or recite, the document or information which initiated the proceedings and thus gave the tribunal its jurisdiction; and also the document which contained their adjudication. Thus in the old days the record sent up by the justices had, in the case of a conviction, to recite the information in its precise terms; and in the case of an order which had been decided by quarter sessions by way of appeal, the record had to set out the order appealed from: see Anon. The record had also to set out the adjudication, but it was never necessary to set out the reasons (see South Cadbury (Inhabitants) v Braddon, Somerset (Inhabitants) , nor the evidence, save in the case of convictions. Following these cases, I think the record must contain at least the document which initiates the proceedings; the pleadings, if any; and the adjudication; but not the evidence, nor the reasons, unless the tribunal chooses to incorporate them. If the tribunal does state its reasons, and those reasons are wrong in law, certiorari lies to quash the decision.

The next question which arises is whether affidavit evidence is admissible on an application for certiorari. When certiorari is granted on the ground of want of jurisdiction, or bias, or fraud, affidavit evidence is not only admissible, but it is, as a rule, necessary. When it is granted on the ground of error of law on the face of the record, affidavit evidence is not, as a rule, admissible, for the simple reason that the error must appear on the record itself: see Rex v Nat Bell Liquors Ltd . Affidavits were, however, always admissible to show that the record was incomplete, as, for instance, that a conviction omitted the evidence of one of the witnesses (see Chitty's Practice, Vol. 2, at p.222, note (d)), or did not set out the fact that the justices had refused to hear a competent witness for the defence (see Rex v Anon .), whereupon the court would either order the record to be completed, or it might quash the conviction at once. [Footnotes omitted]

152 The “record” has thus traditionally been limited to the formal documents initiating and defining the matter in the inferior court and the impugned order or determination. The restriction prompted the NSW Court of Appeal in GJ Coles v Retail Trade Industrial Tribunalto expand the operation of certiorari by including the transcript and record of the proceedings before the tribunal in the “record”, determining that to do otherwise would make “formalism triumphant”. However, the High Court in Craig v South Australia, rejected that view. In entrenching the traditional approach of the common law, the High Court said:

The history of the writ of certiorari can be traced back to at least the fourteenth century. That history provides part of the context in which questions of the ambit of the writ must be resolved. Resort to medieval history should not, however, be permitted to allow either a transformation of certiorari into a general appeal or a side-stepping of the nineteenth century legislative reforms aimed at curbing the excessive availability of the writ which had given rise to undesirable technicality. Those legislative reforms were directly concerned with challenges to convictions before magistrates. Their practical effect was, however, to bring about a general confinement of the content of an inferior court's "record" for the purposes of certiorari to the documents initiating and defining the matter in the inferior court and the impugned order or determination.

One finds in some recent cases in this country support for the adoption of an expansive approach to certiorari which would include both the reasons for decision and the complete transcript of proceedings in the "modern record" of an inferior court. As Priestley JA pointed out in Commissioner for Motor Transport v Kirkpatrick , that approach is not precluded by any direct decision of this Court. Nonetheless, it should, on balance, be rejected. For one thing, it is inconsistent with the weight of authority in this Court which supports the conclusion that, in the absence of some statutory provision to the contrary, the record of an inferior court for the purposes of certiorari does not ordinarily include the transcript, the exhibits or the reasons for decision. More importantly, the approach that the transcript of proceedings and the reasons for decision constitute part of "the record" would, if accepted, go a long way towards transforming certiorari into a discretionary general appeal for error of law upon which the transcript of proceedings and the reasons for decision could be scoured and analysed in a search for some internal error. It is far from clear that policy considerations favour such an increase in the availability of certiorari to correct non-jurisdictional error of law. In particular, a situation in which any proceeding in an inferior court which involved a disputed question of law could be transformed into superior court proceedings notwithstanding immunity from ordinary appellate procedures would represent a significant increase in the financial hazards to which those involved in even minor litigation in this country are already exposed. On balance, it appears to us that the question whether there should be such an increase in the availability of certiorari, or of orders in the nature of certiorari, is one that is best left to the responsible legislature. [Footnotes omitted]

153 In this case  Grocon  has elected to proceed by way of judicial review pursuant to O.56 of the Rules of Court. It has not proceeded under the Administrative Law Act 1978 (the “ALA”). In Van Phuc Diep v Appeal Costs Board, Gillard J made the following observations as to the relationship between the two procedures:

The nature of the jurisdiction of this court under the Act was considered by the Full Court in Monash University v Berg and Ors . There is no doubt that one of the objects of the Act was to overcome some of the technical aspects of the prerogative writ jurisdiction of the court, but equally it is clear the Act did not alter the jurisdiction which the court has at common law to supervise the decision making process of an administrative body. An order for review is not an application for a judicial review pursuant to Order 56 of the Rules of Court. Nevertheless, the court exercises the same common law supervisory jurisdiction that it has in respect of judicial review. That jurisdiction is limited.

154 The principal object of the ALA is to facilitate procedure and to eliminate problems associated with judicial review of administrative decisions. However, at least in one respect, the Act does modify the common law relating to certiorari.

155 The ALA in Victoria provides a legislative means to free certiorari from the common law constraint as to what comprises the record. Section 10 provides:

10. Reasons to be part of record

Any statement by a tribunal or inferior court whether made orally or in writing, and whether or not made pursuant to a request or order under section 8, of its reasons for a decision shall be taken to form part of the decision and accordingly to be incorporated in the record.

156 Since s.10 refers to "inferior courts", it must be taken to operate in respect of proceedings for judicial review brought otherwise than under the ALA. This is so because decisions of inferior courts cannot be reviewed under the ALA. Accordingly, the section applies to an application for an order in the nature of certiorari brought under O.56 of Chapter I of the Rules. Thus, by reason of s.10, “the record” in the case of a decision by a ‘tribunal’ as it is defined in the ALA or by an inferior court, includes any reasons given for the decision, whether in writing or orally.

157 Section 2 of the ALA provides definitions of a decision, a person affected and a tribunal. These concepts, when read together, explain the nature of the tribunal to which the Act applies, and in particular the type of tribunal to which s. 10 of the Act applies. The definitions are as follows:

In this Act unless the context or subject-matter otherwise requires-

decision means a decision operating in law to determine a question affecting the rights of any person or to grant, deny, terminate, suspend or alter a privilege or licence and includes a refusal or failure to perform a duty or to exercise a power to make such a decision;

person affected in relation to a decision, means a person whether or not a party to proceedings, whose interest (being an interest that is greater than the interest of other members of the public) is or will or may be affected, directly or indirectly, to a substantial degree by a decision which has been made or is to be made or ought to have been made by the tribunal;

tribunal means a person or body of persons (not being a court of law or a tribunal constituted or presided over by a Judge of the Supreme Court) who, in arriving at the decision in question, is or are by law required, whether by express direction or not, to act in a judicial manner to the extent of observing one or more of the rules of natural justice.

158 In my opinion, an adjudicator appointed under the Act is a “tribunal” within the meaning of the ALA, and the reasons for the decision of the adjudicator made under the Act, by reason of s.10 ALA, are part of the record which may be examined on an application for a judicial review pursuant to Order 56 of the Rules of Court.

159 The formal documents initiating and defining the matter for adjudication under the Act also comprise the payment claim made under s.14 of the Act and any payment schedule provided by the respondent under s.15 of the Act. Added to this is the decision of the adjudicator which defines the outcome of the proceeding before him. Further, in certain circumstances the whole are part of the submissions filed by the parties may constitute part of the record in so far as they assist to define the issues in the adjudication.

160 Other material placed before the adjudicator, such as documentary evidence, or any record of oral evidence, does not comprise the “record” for the purposes of certiorari. However, such other material may be used for the purpose of impugning a decision on a basis other than that founded on an error on the face of the record, for example, jurisdictional error or a failure to afford procedural fairness.

Certiorari a Discretionary Remedy

161 As McHugh J said in Re McBain:

Certiorari to quash is not granted as of right. Its grant lies in the discretion of the Court.

Declaratory Relief

162  Grocon  also sought declarations that the determinations of the adjudicator and the review adjudicator in each case were void.

163 There is no doubt that the Court has jurisdiction to grant a declaration, provided that the necessary grounds are established.

164 In Oil Basins Ltd v Commonwealth Dawson J observed:

In Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd ((6) (1921) 2 AC 438 , at p.448) in a passage cited in Forster v Jododex Aust Pty Ltd ((7) [1972] HCA 61 ; (1972) 127 CLR 421 , at pp.437-438.), Lord Dunedin set out the requirements which must be satisfied before a court will exercise its discretion to make a declaration:

"The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought.”

Further, in Ainsworth v Criminal Justice Commission a majority of the High Court said:

It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which “(i)t is neither possible nor desirable to fetter by laying down rules as to the manner of its exercise”. However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that (have) not occurred and might never happen” or if “the Court's declaration will produce no foreseeable consequences for the parties”.

165 In this case,  Grocon  has satisfied these jurisdictional threshold considerations for the grant of a declaration. It has a real interest in seeking the relief it claims and that relief is sought in respect of an actual legal controversy.

166 As to the grounds for the grant of a declaration, for the purpose of addressing this aspect of the claim, I will follow the Court of Appeal in Brodyn where it was held that it was open to challenge an adjudicator’s determination and obtain a remedy by way of a declaration of invalidity (and an injunction), but only if:

(a) the basic and essential requirements of the Act for a valid determination are not satisfied;

(b) the purported determination is not a bona fide attempt to exercise the power granted under the Act; or

(c) there is a substantial denial of the measure of natural justice required under the Act.

167 The grant of a declaration, like certiorari, is subject to discretionary considerations.

168 With these principles in mind, I will now turn to the facts surrounding the making of the O’Brien determination, the Davenport review determination and the specific grounds of review.

Background to the Adjudication Determinations

The O’Brien Determination

169 In the O’Brien determination, the adjudicator proceeded to analyse the documentary material and the submissions placed before him by the parties in some detail in his 19 pages of reasons. The work undertaken by the claimant PCJV was modelling and detailing of structural steelwork for the Melbourne Rectangular Stadium situated in Batman Avenue, Melbourne.  Grocon  was the head contractor and PCJV was the subcontractor.

170 The parties were in dispute as to what constituted the relevant construction contract. In its adjudication response, the respondent contended that the construction contract was “governed by a draft unexecuted form of contract emailed on 5 May 2008 from Planit Cocciardi to  Grocon  and adopted by the parties”. In the adjudication application on the other hand, the claimant contended that the construction contract comprised the claimant’s tender dated 6 June 2007 and an alleged verbal agreement entered into on 12 September 2008.

171 By way of summary, O’Brien made the following central findings: he found that the claimant PCJV undertook certain “Early Works” for the Project consisting of preliminary roof design development for the agreed cost of $91,800.00. He further found that the claimant, having completed the Early Works by November 2007, commenced the “Major Works” for the Project in or about November 2007, and it did so without the parties having first settled the terms of their agreement. He found that delays and design changes continued to hinder progress. Nevertheless the claimant continued with its work in spite of no value for its services having been agreed or formalised. In September 2008 a major dispute arose in relation to the value of the work undertaken by the claimant; O’Brien found that a meeting took place between the parties on 12 September 2008. The evidence about the meeting and its outcome was in conflict, nevertheless, O’Brien was satisfied that an agreement was struck at the meeting of 12 September 2008 as to the basis upon which the work should proceed and the basis upon which the work which had already been undertaken should be paid for. In essence, he determined that work carried out between September 2008 and December 3008, together with work previously commissioned that remained incomplete, was performed pursuant to the unwritten “separate Arrangement of 12 September 2008”. O’Brien found that the claimant appeared to have continued with the work into December 2008. By mid December 2008 O’Brien found that relations between the parties were “at breaking point”. Only part of the September 2008 Payment Claim made by PCJV had been paid by  Grocon  ; no payments had been received for the subsequent Payment Claims for October, November and December, and no payments had since been made. He found that by a Payment Claim made on 24 April 2004 (the “24 April Payment Claim”) the claimant claimed the sum of $544,841.00 (including GST) in respect of the work described for work claimed to have been completed in the months of September, October, November and December 2008. The 24 April Payment Claim, he found, included all four previous payment claims which by that date had not been paid, and in the case of the September 2008 payment claim, only paid in part.

172 O’Brien made specific findings as to the validity of the 24 April Payment Claim. Notwithstanding the respondent’s submissions to the contrary, he was satisfied that:

• the 24 April Payment Claim was a valid Final Payment Claim which complied with s.14(2) of the Act;

• being a Final Payment Claim it complied with s.14(5)(b) of the Act, in that it was made within 3 months of the Reference Date as determined in accordance with s.9(2)(d)(iii)(B) of the Act;

• it did not contravene s.14 (6), (7), (8) or (9) of the Act; and

• was valid under s.15(2) and (3) of the Act.

O’Brien was also satisfied that the various formalities under the Act in relation to his appointment and the reference of the matter to him for adjudication had been complied with.

173 The adjudication determination dealt with numbers of issues. O’Brien correctly determined, for example, s.10B(1) of the Act which provided that an ”excluded amount” (as defined) must not be taken into account in calculating the amount of a progress payment. The respondent alleged that the whole of the amount of $544,841.00 (including GST) was an excluded amount. Mr O’Brien rejected the submission of the respondent and determined that the whole of the sum claimed was not an excluded amount. He ultimately determined that the claimant PCJV was entitled to be paid by way of an interim payment pursuant to the Act, the amount of $544,841.00 (including GST). He also determined, pursuant to s.12(1)(b) of the Act that the due date for payment was 8 May 2008. A rate of interest was also determined pursuant to s.12(2)(a) of the Act payable on the adjudicated amount. Further, in accordance with s.45(4) of the Act the respondent was ordered to pay the adjudication fees.

The Davenport Review Determination

174 As to the Davenport review determination, his reasons extended over 13 pages. Section 28B(3) provides only one ground for adjudication review, namely that the adjudicated amount included an “excluded amount” (as defined). Davenport, having analysed the O’Brien determination and the submissions of the parties, was not satisfied that the payment claim included an excluded amount. Accordingly he was satisfied that the respondent’s application for review lacked any merit. He confirmed the O’Brien determination and ordered the respondent to pay the review adjudicator’s fees.

The O’Brien Determination - Grounds for Judicial Review

175  Grocon  relied upon 10 grounds for the review of the O’Brien determination. Each shall be dealt with in turn.

The Service Grounds

176 By Grounds 1 and 2 of its application,  Grocon  attacked the service of the payment claim, alleging that the service of the claim was out of time in that it failed to comply with the statutory requirements.

The Grounds were:

Ground 1: Contrary to section 9(2) of the Act, and/or section 14(4)(b) or section 14(5)(b) of the Act, O’Brien proceeded with an adjudication under the Act in respect of the payment claim dated 24th April 2009 which was served by PCJV later than 3 months after the relevant reference date under the Act and O’Brien wrongly determined that the said payment claim was made within time by PCJV.

Ground 2: Alternatively to Ground 1 above, it was not open to O’Brien to find in accordance with law or the Act, and he erred in so finding, that the relevant reference date for the payment claim dated 24th April 2009 was 11th February 2009 and O’Brien should have found in accordance with the Act and on the material provided to him that the correct reference date to which the said payment claim related was no later than 5th December 2008, being the date of invoice 00000018.

177  Grocon  ’s contentions on Grounds 1 and 2 were that:

(a) The invoices constituting the payment claim dated 24th April 2009 in fact respectively related to work performed for the periods ending 26th September 2008 (invoice 00000015), 24th October 2008 (invoice 00000016), 28th November 2008 (invoice 00000017) and 5th December 2008 (invoice 00000018).

(b) Each of these invoices recorded on their face that they were a claim for payment under the Act.

(c) The only reference dates provided in the payment claim dated 24th April 2009, or to which he payment claim dated 24th April 2009 related, were the dates of the respective invoices 00000015 to 00000018.

(d) PCJV contended in its adjudication submissions that certain drawings sent by it to  Grocon  on 9th or 10th February 2009 pursuant to an agreement settling an interlocutory injunction application constituted a further reference date whereas:

(i) No claim was made by PCJV for any work or charge in sending the said drawings to  Grocon  on 9th or 10th February 2009; and

(ii) Such documents were provided pursuant to the settlement of the injunction application on 8th January, 2009 and did not arise under any building contract subject to the Act.

(e) The O’Brien determination proceeded on the erroneous basis that the relevant reference date was 11th February 2009.

Finding as to a “Final Payment Claim”

178 The adjudicator found, however, that the relevant payment claim, the subject of the adjudication, was a ‘final payment claim’ within the meaning of the Act.

179 The subject claim was that identified in “Tax Invoice 000000020” and dated 24 April 2009. This comprised the total of the payment claims which had been previously made, but unpaid in respect of work performed for the periods ending 26 September 2008 (reflected in invoice 00000015), 24 October 2008 (reflected in invoice 00000016), 28 November 2008 (reflected in invoice 00000017) and 5 December 2008 (reflected in invoice 00000018).

180 A payment claim may be made under the Act in respect of a final payment: s.14(7). This may be done under the section if:

(a) a claim for the payment of that amount has been made in respect of that payment under the contract; and

(b) that amount was not paid by the due date under the contract for the payment to which the claim relates.

181 The Act provides no definition of what is meant by a “final payment” or a “final payment claim”.

182 The construction contract between the parties, such that it was, provided no definition, of the term, and there is no evidence that the construction contract made express provision for a final payment or a final payment claim.

183 Further, it was not suggested in argument that the term had any recognised trade usage in the construction industry.

184 On its face the 24 April payment claim was not described as a “final payment claim”. Nevertheless, it was common ground that the 24 April payment claim was in fact the last payment claim that was made by the claimant PCJV against  Grocon  in respect of work it undertook for the Project and goods and services it had supplied in respect of the Project. It was also common ground that no part of the 24 April payment claim had been paid by  Grocon  and the total amount remains unpaid.

185 The adjudicator was entitled to make the finding that the 24 April payment claim was a final payment claim.

186 In the first place, there was no jurisdictional error in coming to this conclusion. The legislation, in my opinion, intended to confer this kind of determination to an adjudicator, such that even if an error was made in making the finding, an adjudicator remained within jurisdiction. In other words, the adjudicator had jurisdiction to make a wrong finding of this type. If a decision maker reaches a conclusion on a matter which he or she is authorised to decide, a contrary conclusion which is correct in the eyes of the court on a judicial review, will not vitiate the decision as a jurisdictional error.

187 Second, as there was some evidence to support the finding, there was no error of law on the face of the record in respect of it.

188 Third, for these reasons, it could not be said that in making this finding the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

189 Having made the finding that the 24 April payment claim was a “final payment claim”, the earlier dates for work done reflected in the invoices, respectively dated 26 September 2008, 24 October 2008, 28 November 2008 and 5 December 2008, became irrelevant to a determination of the applicable statutory “reference date” and the prescribed date for service of the payment claim which was fixed by that “reference date”. As explained below, the sections which dictated the date for service of a “final payment claim” were s.14(5)(b) read in conjunction with s.9(2)(d)(iii)(B), and not s.14(4)(b) read in conjunction with s.9(2)(a)(b) or (c), as contended for by the respondent.

Whether “Final Payment Claim” Served Within Time

190 Section 14 of the Act makes provision for the making of a payment claim under the Act. Time limits for the service of payment claims are provided for by s.14(4) in respect of a progress payment (other than a payment claim in respect of a progress payment that is a final, single or one-off payment), and by s.14(5) in respect of a progress payment that is a final, single or one-off payment. Section 14(5) provides:

(5) A payment claim in respect of a progress payment that is a final, single or one-off payment may be served only within-

(a) the period determined by or in accordance with the terms of the construction contract; or

(b) if no such period applies, within 3 months after the reference date referred to in section 9(2) that relates to that progress payment.

There being no relevant provision to the contrary in the construction contract between the parties, the payment claim was required to be served within 3 months of the relevant reference date determined pursuant to s.9(2) of the Act.

191 The reference date in respect of a final payment claim is provided for in s.9(2)(d) of the Act as follows:

(d) in the case of a final payment, if the contract makes no express provision with respect to the matter, the date immediately following-

(i) the expiry of any period provided in the contract for the rectification of defects or omissions in the construction work carried out under the contract or in related goods and services supplied under the contract, unless subparagraph (ii) applies; or

(ii) the issue under the contract of a certificate specifying the final amount payable under the contract a final certificate; or

(iii) if neither subparagraph (i) nor subparagraph (ii) applies, the day that-

1. construction work was last carried out under the contract; or

2. related goods and services were last supplied under the contract.

192 In the circumstances of this case, there being no evidence of the matters referred to in s.9(2)(d) (i) or (ii) being complied with, s.9(2)(d)(iii) applies.

193 There was evidence that PCJV did supply goods and services under the construction contract between it and  Grocon  in the nature of drafting services. The adjudicator found that the claimant PCJV provided goods and services to the respondent  Grocon  on 9 and 10 February 2009 when it provided plans to the respondent. In the claimant’s submissions provided to the adjudicator, PCJV said:

The last date on which goods and services were provided under the contract was on or about 10 February 2009, when the Claimant provided revised steelwork marking plans to the Respondent.

This was denied by  Grocon  in its adjudication response provided to the adjudicator. The respondent said:

At no stage since December 2008 has PlanIt Cocciardi undertaken any work from  Grocon  in relation to the Project, let alone in respect of the 24 April 2009 payment claim. The parties have been in litigation since 6 January 2009. The documents provided to  Grocon  by PlanIt Cocciardi pursuant to the interim settlement agreement recorded in attachment #3 hereto were not provided pursuant to a building contract pursuant to the Act or a request by  Grocon  of [or] PlanIt Cocciardi for further works, albeit pursuant to either the true subcontract or the PlanIt Cocciardi version. PlanIt Cocciardi were required to deliver the documents pursuant to that interim settlement by 14 January, 2009.

In the claimant’s response before the adjudicator, PCJV said:

The Claimant provided services under the Interim Terms of Settlement, in late January 2009.

194 Section 4 of the Act defines a construction contract as follows:

Construction contract means a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party

195 The definition is broad. It includes a contract or other arrangement. It does not exclude a contractual obligation or arrangement to provide goods or services which arises from the settlement of a dispute in relation to goods or services provided under the original construction contract. Such a contract or arrangement could well involve the supply of “related goods and services under the [original construction] contract” pursuant to s.9(1) of the Act.

196 The building industry is prone to disputation due to the complex nature of the projects and the need to use sub-contractors to complete many building projects. Dispute resolution, whether by negotiation onsite, or by formal contractual alternative dispute resolution systems such as mediation, arbitration or expert determination is commonplace in construction projects during the administration of the contract. Litigation too, may play a part as a last resort. The resolution of any such a dispute may well involve the parties entering into a contract or other arrangement to continue to supply goods or services which the supplying party was under an obligation to provide under the original construction contract in any event, had the contact run its course without disputation.

197 On the material facts as found by the adjudicator, it was reasonable for him to infer that the Interim Settlement which was achieved on 8 January 2009 was in relation to work or goods and services which PCJV was in any event obliged to perform or provide under the original construction contract.

198 PCJV said in its written submission to the adjudicator dated 21 May 2009 that:

The last date on which goods and services were provided under the contract was on or about 10 February 2009, when the Claimant provided revised steelwork marking plans to the Respondent (Tab 8).

Further, in its response submissions to the adjudicator dated 11 June 2009, PCJV said:

The Claimant provided services under the Interim Terms Settlement, in late January 2009.

199 In its adjudication response provided to the adjudicator dated 28 May 2009,  Grocon  said:

The parties have been in litigation since 6th January 2009. The documents provided to  Grocon  by PlanIt Cocciardi pursuant to the interim settlement agreement recorded in attachment #3 hereto were not provided pursuant to a building contract pursuant to the Act or a request by  Grocon  of PlanIt Cocciardi for further works, albeit pursuant to either the true subcontract or the PlanIt Cocciardi version. PlanIt Cocciardi was required to deliver the documents pursuant to that interim settlement by 14th January 2009.

200 The adjudicator, however, found against  Grocon  on this matter, as he was entitled to do. The adjudicator found:

Subsequently in early January 2009 the respondent commenced proceedings in the Supreme Court which resulted in the Claimant agreeing pursuant to Interim Terms of Settlement dated 8 January 2009 to release the documents it had withheld because of non-payment of its September to December 2008 invoices. On 9 and 10 February 2009 the Claimant provided to the respondent the withheld current drawings including all electronic files and extracts of the 3D model.

201 It was not suggested that there was no evidence before the adjudicator upon which he could come to this finding, either based on direct evidence or upon evidence from which it was possible to draw reasonable inferences. Indeed, there was such evidence. For example, the respondent placed before the adjudicator as part of its response submission PCJV’s Defence and Counterclaim filed in the Supreme Court proceeding. By paragraph 12 of its pleading, PCJV said:

Save that it admits that it declined to accede to  Grocon  ’s demands, it otherwise denies each and every allegation in paragraph 12 and says further that it declined to provide the PCJV shop drawings to  Grocon  electronically because  Grocon  had refused to pay for outstanding invoices and had threatened to put PCJV “out of business”.

202 Having made the finding that he did in relation to the documents (goods) provided by PCJV pursuant to the Interim Settlement, namely documents (goods) which PCJV had a pre-existing obligation to supply under the original construction contract, the supply of those goods on 9 and 10 February 2009 was, as the adjudicator found, “undoubtedly the provision of goods and services within the meaning of s.6(1) of the Act” which, further was the supply of goods and services under the original construction contract within the meaning of s.9(1)(b) of the Act. The adjudicator was therefore entitled, on the basis of his finding, to calculate the passage of time for the purposes of service of the PCJV progress claim from 10 February 2009.

203 In determining an adjudication application an adjudicator is obliged to consider, inter alia, the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim: s.23(2)(c). Accordingly, within the meaning of the Act, there was some evidence before the adjudicator to justify the making of these findings. The adjudicator was entitled to arrive at the conclusion he did. For these reasons, from 10 February 2009, PCJV was entitled to a progress payment under the Act pursuant to s.9(2)(d)(iii)(A) or (B) of the Act.

204 For these reasons, the PCJV progress claim dated and served on 24 April 2009 was well within the three month time frame permitted by s.14(5)(b) of the Act. There was no reviewable error in arriving at this finding.

205 The adjudicator found that the 24 April payment claim was served on the respondent on the same day, 24 April 2009. He was satisfied that the payment claim was served in accordance with the service provision of the Act: s.50.

206 The adjudicator was entitled to make the finding that the 24 April payment claim, as a final payment claim, was served within the time prescribed by s.14(5)(b) of the Act.

207 There was no jurisdictional error in coming to this conclusion. As in the case of the determination as to the final payment claim, the legislation, in my opinion, intended to confer this kind of jurisdictional fact determination relating to service of the prescribed documents to an adjudicator, such that even if an error was made in making the finding, an adjudicator remained within jurisdiction. Again in this context, the adjudicator had jurisdiction to make a wrong finding of this type. Second, as there was some evidence to support the finding, there was no error of law on the face of the record in respect of it. Third, for these reasons, it could not be said that in making this finding the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

208  Grocon  ’s case on Ground 2 was founded on the same material facts as it relied upon under Ground 1. Accordingly, I come to the same conclusion as I do in relation to Ground 1.

The Section 14 Grounds

209  Grocon  claimed that PCJV’s progress claim breached further provisions of the Act. It said in Grounds 3-7:

Ground 3: Contrary to section 14(6) of the Act,

(a) O’Brien failed to reject the payment claim dated 24th April 2009 on the basis that it amounted to a further payment claim in respect of the payment claims dated 26th September 2008, 24th October 2008, 28th November 2008 and 5th December 2008 and in essence merely duplicated those respective payment claims; and

(b) it was not open to O’Brien to find in accordance with law or the Act, and he erred in so finding, that the payment claim dated 24th April 2009 was valid despite section 14(6) of the Act.

Ground 4: Alternatively to Ground 3 above, it was not open to O’Brien to find in accordance with law or the Act, and he erred in so finding, that section 14(7) of the Act applied to the payment claim dated 24th April 2009 or that PCJV was entitled to serve the said payment claim in circumstances where it did not claim for further work or additional sums alleged to be due.

Ground 5: Contrary to section 14(8) of the Act, O’Brien erred by failing to reject the payment claim dated 24th April 2009 on the basis that it amounted to more than one payment claim in respect of the reference dates 26th September 2008, 24th October 2008, 28th November 2008 and 5th December 2008.

Ground 6: Alternatively to Ground 5 above, it was not open to O’Brien to find in accordance with law or the Act, and he erred in so finding, that the payment claim dated 24th April 2009 was not made in respect of the reference dates 26th September 2008, 24th October 2008, 28th November 2008 and 5th December 2008.

Ground 7: Contrary to section 14(9) of the Act, it was not open at law for O’Brien to find, and O’Brien erred in finding, that PCJV was entitled to rely on section 14(9) of the Act in respect of the payment claim dated 24th April 2009 where that claim:

(a) Was in respect of exactly the same work and charges for the payment claims dated 26th September 2008, 24th October 2008, 28th November 2008 and 5th December 2008; and/or

(b) Was in respect of exactly the same reference dates 26th September, 2008, 24th October 2008, 28th November 2008 and 5th December 2008; and

(c) No claim was made by PCJV for any further work or sums or in respect of any later reference dates arising after or in addition to those said payment claims or reference dates.

210  Grocon  ’s case on Ground 3 was that the payment claim dated 24 April 2009 merely provided further detail and supporting documents for the payment claims respectively dated 26 September 2008, 24 October 2008, 28 November 2008 and 5 December 2008 and did not relate to, arise from or claim for, any additional work under the alleged contract occurring after 5 December, 2008.

211  Grocon  ’s case on Ground 4 was founded on the same material facts as it relied upon under Ground 3, and its cases on Grounds 5, 6, and 7 were founded on the same material facts as it relied upon under Grounds 1 and 3.

212 Section 14 requires close analysis. It relevantly provides in sub-sections (6)–(9):

(6) Subject to subsection (7), once a payment claim for a claimed amount in respect of a final, single or one-off payment has been served under this Act, no further payment claim can be served under this Act in respect of the construction contract to which the payment claim relates.

(7) Nothing in subsection (6) prevents a payment claim for a claimed amount in respect of a final, single or one-off payment being served under this Act in respect of a construction contract if-

(a) a claim for the payment of that amount has been made in respect of that payment under the contract; and

(b) that amount was not paid by the due date under the contract for the payment to which the claim relates.

(8) A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.

(9) However, subsection (8) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim if the amount has not been paid.

213 The words of ss.14(6) and (8) are words of prohibition, subject only to the exceptions provided in each case by ss.14 (7) and (9) respectively.

214 In this case only one final payment claim was made, that of 24 April 2009. It does not offend s.14(6). Further, s.14(7) permits the inclusion in a final payment claim of sums which may previously have been claimed as progress payments under the relevant construction contract and under the Act, but which have not been paid. This is what happened in this case. Further, as to s.14(8), the relevant reference date for the final payment claim was found to be 10 February 2009. There is no evidence that any other payment claim was served in respect of that reference date. Accordingly, the final payment claim does not contravene s.14(8) and the exception in s.14(9) has no application.

215 The adjudicator was entitled to make the findings he did in relation to the s.14 issues. The legislation, in my opinion, intended to confer this kind of determination to an adjudicator, such that even if an error was made in making the finding, an adjudicator remained within jurisdiction. In other words, the adjudicator had jurisdiction to make wrong findings of this type. Second, as there was some evidence to support the findings, there was no error of law on the face of the record in respect of them. Third, for these reasons, it could not be said that in making these findings the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

The Claimable Variation / Excluded Amount Grounds

216  Grocon  challenged the findings made by the adjudicator in relation to claimable variations and excluded amounts as those terms are defined in s.10A and s.10B of the Act. It said in Grounds 8 and 9:

Ground 8: Contrary to sections 10A and 10B of the Act, it was not open at law for O’Brien to find, and O’Brien erred in finding, that the payment claim dated 24th April 2009 arose in respect of claimable variations and/or did not include excluded amounts in circumstances where:

(a) Each of  Grocon  and PCJV contended before him that the relevant construction contract was in writing;

(b) Each of the said contended for contracts included a dispute resolution method complying with section 10A(3)(d)(ii) of the Act;

(c) The original consideration agreed for the construction contract was $1,550,000 (plus GST) and the payment claim dated 24th April 2009 was claiming in respect of variations totalling $554,841; and

(d) Where  Grocon  had already paid to PCJV, inclusive of agreed variations, the sum of $2,482,869 (plus GST).

Ground 9: Further, it was not open to O’Brien to find, and he erred in finding, that:

(a) On 12th September 2008 PCJV and  Grocon  entered into a new novated contract or arrangement;

(b)  Grocon  ever agreed to pay PCJV for work at an hourly rate in lieu of the fixed price contract price of $1,550,000 plus GST plus agreed variations;

(c) There was never any formal agreement between  Grocon  and PCJV as to the fixed price contract price of $1,550,000 plus GST; and/or

(d) The payment claim dated 24th April 2009 was not made in respect of a non claimable variation within the meaning of sections 10A and 10B of the Act.

217 In support of Ground 8,  Grocon  in its Grounds relied upon the following documents:

(i) A draft unexecuted form of contract emailed on 5th May 2008 from PCJV to  Grocon  ;

(ii) PCJV’s tender document dated 6th June 2007 numbered PDG-CPL-JV-L001;

(iii) The affidavit sworn by Peter Cocciardi on 17th April 2009;

(iv) The pleadings by PCJV in its defence and counterclaim filed in Supreme Court of Victoria action number 4022 of 2009; and

(v) The adjudication submissions made by PCJV.

218 In support of Ground 9,  Grocon  relied in its Grounds on an email sent 3 September 2008 being the only contemporaneous document provided by it to PCJV in respect of the request to vary the contract price in September 2008 and the affidavit sworn 6 January 2009 by Steve Richardson.

219 However, in its submissions to the Court,  Grocon  relied upon “the detailed submissions made to O’Brien and Davenport in this regard and the oral and written submissions made in this regard on 24 and 27 July, 2009”.

220 For the purposes of determining whether an error of law on the face of the record exists, all of the aforementioned material but the adjudication submissions of PCJV and  Grocon  , and then only to the extent that they assist to define the issues in dispute, are excluded from the relevant record which may be examined. Nevertheless, for the purposes of determining whether there has been jurisdictional error, I am able to examine all of the material.

221 A short analysis of relevant sections of the Act is necessary to appreciate the thrust of these Grounds. Section 10 specifies what constitutes a progress payment for the purposes of the Act. It provides in subsections (1)–(3) as follows:

10. Amount of progress payment

(1) The amount of a progress payment to which a person is entitled in respect of a construction contract is to be-

(a) the amount calculated in accordance with the terms of the contract; or

(b) if the contract makes no express provision with respect to the matter, the amount calculated on the basis of the value of-

(i) construction work carried out or undertaken to be carried out by the person under the contract; or

(ii) elated goods and services supplied or undertaken to be supplied by the person under the contract- as the case requires.

(2) Despite subsection (1) and anything to the contrary in the construction contract, a claimable variation may be taken into account in calculating the amount of a progress payment to which a person is entitled in respect of that construction contract.

(3) Despite subsection (1) and anything to the contrary in the construction contract, an excluded amount must not be taken into account in calculating the amount of a progress payment to which a person is entitled in respect of that construction contract.

Thus, a “claimable variation” may be taken into account in calculating the amount of a progress payment: s.10(2); but an “excluded amount” must not be taken into account: s.10(3).

222 Section 10A then sets out the classes of variation to a construction contract (the claimable variations) that may be taken into account in calculating the amount of a progress payment to which a person is entitled in respect of that construction contract.

223 Section 10B follows by setting out the classes of amounts (excluded amounts) that must not be taken into account in calculating the amount of a progress payment to which a person is entitled under a construction contract.

224 Pursuant to s.10A, one class of claimable variation is defined as follows in s.10A(3):

(3) The second class of variation is a variation where-

(a) the work has been carried out or the goods and services have been supplied under the construction contract; and

(b) the person for whom the work has been carried out or the goods and services supplied or a person acting for that person under the construction contract requested or directed the carrying out of the work or the supply of the goods and services; and

(c) the parties to the construction contract do not agree as to one or more of the following-

(i) that the doing of the work or the supply of goods and services constitutes a variation to the contract;

(ii) that the person who has undertaken to carry out the work or to supply the goods and services under the construction contract is entitled to a progress payment that includes an amount in respect of the work or the goods and services;

(iii) he value of the amount payable in respect of the work or the goods and services;

(iv) he method of valuing the amount payable in respect of the work or the goods and services;

(v) the time for payment of the amount payable in respect of the work or the goods and services; and

(d) subject to subsection (4), the consideration under the construction contract at the time the contract is entered into-

(i) is $5, 000, 000 or less; or

(ii) exceeds $5, 000,000 but the contract does not provide a method of resolving disputes under the contract (including disputes referred to in paragraph (c)).

(4) If at any time the total amount of claims under a construction contract for the second class of variations exceeds 10% of the consideration under the construction contract at the time the contract is entered into, subsection (3)(d) applies in relation to that construction contract as if any reference to "$5,000,000" were a reference to "$150,000".

225 The statutory example provided under s. 10A is as follows:

A building contractor enters into a construction contract. The consideration (contract sum) under the contract at the time the contract is entered into is $3 million. The contract contains a dispute resolution clause.

The contractor undertakes work at the direction of the other party. The contractor claims (the new claim) that the work is a variation to the contract. The other party does not agree that the work constitutes a variation to the contract (disputed variation). The contractor has already made a number of claims for disputed variations under the contract. The new claim brings the total amount of claims for disputed variations under the contract to $350,000.

This amount exceeds 10% of the contract sum. As the contract sum exceeds $150,000 and the contract contains a dispute resolution clause, the disputed variation in the new claim and all subsequent disputed variations under the contract will not be claimable variations under this Act.

226  Grocon  contended before the adjudicator that the construction contract between it and PCJV, although the consideration under it exceeded $5,000,000, it contained a method of resolving disputes under the contract, within the meaning of s.10A(3)(d)(ii) of the Act. It followed that there were no claimable variations which PCJV could claim as part of a progress or final payment claim under the construction contract.  Grocon  relied upon a mediation clause which was contained in an unexecuted deed which the adjudicator found had been submitted by  Grocon  to PCJV on 21 November 2007.  Grocon  contended that this document comprised the construction contract between the parties.

227 PCJV contended in its written submission to the adjudicator that:

The parties differ as to whether the contract is the Claimant’s tender dated [6] June 2007 and the subsequent verbal agreement of 12 September 2008, or the Respondent’s draft unexecuted deed [supplied by  Grocon  to PCJV on 21 November 2007].

228 The adjudicator rejected  Grocon  ’s contention that the construction contract was comprised in the unexecuted deed which it provided to PCJV on 21 November 2007. As the adjudicator found in his reasons:

According to the Claimant, the terms of the Deed in no way harmonised with the terms in the Quote and were unacceptable to the Claimant. Mr Cocciardi says: “[The Claimant] denies that this is the relevant contract ... discussions concerning the scope of works and the terms of the contract continued throughout the following months”.

The adjudicator further found that:

In fact on 5 May 2008 the Claimant returned the Deed to the Respondent with numerous marked up amendments and additions.

The adjudicator further found in conclusion that “The Deed was never agreed”. The adjudicator was entitled to make these findings of fact. There was some evidence available to him to do so arising from the submissions made to him by PCJV. Accordingly, the mediation clause said to be contained in the deed was able to be rejected by the adjudicator without falling into reviewable error on the face of the record.

229 As to the contention of PCJV that its tender dated [6] June 2007 and the subsequent verbal agreement of 12 September 2008 comprised the construction contract, the adjudicator also rejected this position in part. He found that, although the claimant’s tender of 6 June 2007 was a detailed document, it also provided for execution by the parties in the event that it was agreed to proceed on the basis of its terms, however, it was never executed.

230 The adjudicator found that the work carried out between September 2008 and December 2008 together with work previously commissioned that remained incomplete was performed pursuant to the “separate Arrangement of 12 September 2008”. The Adjudicator also found that the tender (which he described as the “Quote“) did not constitute a binding contract “certainly with regard to the work claimed for in the final payment claim; the arrangement [entered into on 12 September 2008] constitutes the contract and it contains no dispute resolution provision”.

231 The adjudicator was entitled to make these findings of fact and he fell into no error on the face of the record in doing so. There was some evidence available to him to make the findings arising from the submissions made to him by PCJV. Accordingly, the mediation clause said to be contained in the Quote was also able to be rejected by the adjudicator without falling into reviewable error on the face of the record.

232 The adjudicator further found in relation to other arguments pressed by  Grocon  before him under s.10A:

I reject the argument that the Payment Claim amounts to a claim for variations that exceed 10% of the purchase price within the meaning of section 10A(4) of the Act. The Payment Claim is for agreed work under the Arrangement. The alleged agreed contract price sum predating that Arrangement has no relevance to the present Payment Claim.

For these reasons too, the adjudicator found that s.10A(2) of the Act had no relevance.

233 Again, the adjudicator was entitled to make these findings of fact and he fell into no error on the face of the record in doing so. There was some evidence available to him to make the findings arising from the submissions made to him by PCJV.

234 As to the work for which the final payment claim was made was an “excluded amount” under s.10B of the Act. This was rejected by the adjudicator. In this respect he found that “All of the work required ‘to finish the Project’ was work agreed pursuant to the Arrangement [of 12 September 2008]. It is impossible to assess which of that work was variation work”.

235 Yet again, the adjudicator was entitled to make these findings of fact and he fell into no error on the face of the record in doing so. There was some evidence available to him to make the findings arising from the submissions made to him by PCJV.

236 There was no jurisdictional error arising from any of the s.10A or s.10B Grounds. The legislation, in my opinion, intended to confer findings of fact of this kind under s.10A and s.10B of the Act to an adjudicator for determination, such that even if an error was made in making the findings, an adjudicator would remain within jurisdiction. In other words, the adjudicator had jurisdiction to make wrong findings of this type.

237 Further, for these reasons, it could not be said that in making these findings the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

The Procedural Fairness Grounds

238 Finally,  Grocon  challenged the O’Brien determination on grounds of alleged breaches of the priniples of procedural fairness. It said in Ground 10:

Ground 10: Further, insofar as O’Brien purported to make findings critical of  Grocon  and  Grocon  ’s employee, Steve Richardson, and/or made findings against the credit of  Grocon  and Steve Richardson in the O’Brien determination then:

(a) O’Brien failed to accord  Grocon  procedural fairness in respect of such purported findings and criticisms;

(b) O’Brien failed to exercise the powers available to him under section 22(5) of the Act to ensure procedural fairness in respect of such purported findings and criticisms; and

(c) O’Brien made such purported findings and criticisms in his determination in breach of his statutory obligation of good faith as adjudicator under the Act.

239 In support of Ground 10,  Grocon  submitted that in his adjudication determination O’Brien made gratuitous and/or irrelevant criticisms, and/or adverse findings not based on evidence, against the credit of  Grocon  and Steve Richardson. These were said to be found on pages 3 (paragraph 7), 4 (paragraph 4), 5 (paragraph 3), 6 (paragraphs 4-6), 7 (paragraph 1), 19 (paragraphs 2 and 5) and 20 (paragraph 1) of the O’Brien determination.

240 I have examined each of the passages referred to by  Grocon  in support of its procedural fairness ground.

241 Some of the statements found in the reasons are merely findings of fact adverse to  Grocon  . In this regard I refer to page 3 (paragraph 7), page 6 (paragraphs 4-6), page 7 (paragraph 1), page 19 (paragraphs 2 and 5) and page 20 (paragraph 1) of the O’Brien determination. These could not possibly give rise to a complaint of beach of the rules of natural justice of the kind complained of.

242 This leaves two passages in the reasons which fall into a different category. As earlier discussed, this case was somewhat unusual in that there was not written construction contract between the parties. Further, there was disagreement, reflected in the submissions delivered by both of the parties to the adjudicator, as to what comprised the contract. The adjudicator was presented with two starkly different versions of events. Yet in carrying out his duty under the Act, and in considering only those matters he was required to take into account under s.23, and deliver a determination, he was compelled to come to a decision. In arriving at his conclusion as to what constituted the contract, one side’s version had to be accepted in preference to the other side’s version. Secondly, it was permissible for the adjudicator to draw reasonable inferences from the material before him in arriving at his conclusion.

243 With these observations in mind, I turn to the remaining passages complained of by  Grocon  found in the O’Brien determination.

244 At page 4 (paragraph 4) of his reasons, O’Brien said:

According to Mr Richardson: “Although neither I or anyone else on behalf of [the Respondent] expressly responded to [the Claimant’s] emails dated 5 May 2008 and 12 June 2008, from May 2008 [both parties] treated the document returned by [the Claimant] [being the unexecuted Deed amended by the Claimant] as embodying the written terms of the Subcontract at least insofar as performance by [the Claimant] of the preparation and submission in hard copy and electronic form of the drawings was concerned”. I find this scarcely credible considering the relationship of the parties at that stage and quite self serving in the inference that both parties were agreed as to what was required of the Claimant but not of the Respondent.

245 In relation to the passage on page 4 (paragraph 4) of the O’Brien determination which is complained of, they were findings made by the adjudicator as part of his reasoning in rejecting  Grocon  ’s case as to what comprised the construction contract. This was a central issue which separated the parties. Given that they both had exchanged written submissions on the issue, it was hardly surprising that the adjudicator should arrive at a conclusion which rejected one version of events in favour of another. Properly advised, this ought to have been in the contemplation of both parties. Further, in arriving at his conclusion, it was or ought to have been within the contemplation of both parties that the adjudicator would arrive at a conclusion founded on a finding as to what was more likely than not to have occurred. Further, it must have been expected that in arriving at his conclusion, the adjudicator would be in a position to draw inferences, including inferences adverse to one party or the other, from the material provided to him. The expressions of the findings by the adjudicator at page 4 (paragraph 4) of O’Brien’s reasons I take to be no more than this.

246 Then at page 5 (paragraph 3) of his reasons, O’Brien said:

Mr Richardson says that he drafted the correspondence of 1 August 200[8]. The email seems to me to fit an ongoing strategy to keep the Claimant working whilst not actually committing the Respondent to payment of the Claimant’s assessments of and claims for the value of the work involved.

247 As to the finding at page 5 (paragraph 3) the parties had ample opportunity through the exchange of written submissions to advance their respective cases on the point in issue, including submissions as to why one body of evidence should be preferred to the other. PCJV in its submissions to the adjudicator included an affidavit of its managing director, Mr Peter Cocciardi dated 17 April 2009. Mr Cocciardi made specific reference to  Grocon  ’s email of 1 August 2008, saying in relation to the promise for compensation to PCJV stated in the email:

Subsequently, Mr Richardson has tried to resile from this letter and has refused to compensate PCJV as promised.

Further, Mr Cocciardi alleged that  Grocon  proposed, at a meeting on or about 12 September 2008, that PCJV complete the project “at cost” and forgo all outstanding amounts to date. Accordingly,  Grocon  was put on notice of allegations surrounding the email of 1 August 2008, and its subsequent conduct in relation to it, including its attempts to keep the claimant working whilst not committing itself to full payment. The finding made by the adjudicator at page 5 (paragraph 3) of his reasons, was consistent with the thrust of the allegations made by PCJV in its submission material.

248 I have accepted the principle that where, after considering an adjudication application and an adjudication response, an adjudicator comes to the view that there was some matter, not traversed in them, that might cause him or her to deal with the application in a manner adverse to one or other party, the principle enunciated by McHugh J in Muin v Refugee Review Tribunal would ordinarily require that the adjudicator request further written submissions and comments thereon. However, the issue of what constituted the construction contract in this case was squarely raised in the adjudication application and the adjudication response. Further the parties addressed in their submissions the material upon which they relied in support of their respective positions on the matter. By this means  Grocon  was put on notice of the allegations contained in Mr Cocciardi’s affidavit of 17 April 2009, and was in a position to address the matters raised. In my opinion, this was not an occasion which called for the adjudicator to request further written submissions and comments on the matter before handing down his determination.

249 As to the complaint that the findings were personally adverse to Mr Richardson and  Grocon  , I am not satisfied that either individually or as a whole they would impact detrimentally upon his personal reputation or that of his company so as to require any special step to be taken to give him or  Grocon  any further opportunity to be heard on the matters before the reasons and determination were delivered.

250 No substantial breach of the rules of procedural fairness occurred in this case sufficient to amount to a denial of the standard required by the Act, and thus the intervention of certiorari.

Conclusion as to the Grounds for Judicial Review of the O’Brien Determination

251 None of the grounds contended for by  Grocon  in relation to the O’Brien adjudication determination have been made out.

The Davenport Review Determination - Grounds for Judicial Review

252 In seeking to quash the Davenport review determination,  Grocon  relied upon each of the grounds it advanced in relation to the O’Brien determination on the basis that, if the O’Brien determination was void, there would be no valid review adjudication before Davenport which could result in a valid review determination. A decision of this type founded on a nullity, would itself, be a nullity.

253 It follows from my findings in relation to the O’Brien determination that the Davenport review determination is not void on these grounds.

254  Grocon  , however, pressed six further grounds in the judicial review of the Davenport review determination. Four of the six additional grounds for judicial review relied upon by  Grocon  in seeking to overturn the findings of the review adjudicator, being Grounds 1, 3, 5 and 6, in one way or another, relate to the ultimate factual finding made by Davenport that, on the material before him, he was not satisfied that the subject payment claim included an excluded amount. In relation to these four grounds it is not said that there was an error of law on the face of the record in making any of the findings of fact because there was no evidence to support those findings.

255 It needs to be born steadily in mind that on an adjudication review there is only one ground of review open under the Act. An application for an adjudication review may only be made on the ground that the adjudicated amount at the first instance adjudication included an “excluded amount”, as that term is described in s.10B: s.28B(3).

256 Further, an adjudication review is not an appeal. The process should not be used as such. In particular, an adjudication review should not be used as a basis for a re-evaluation of the findings of fact made by the adjudicator at first instance which were used by the adjudicator in reasoning towards making a finding as to the ultimate fact in question on a review, namely whether or not the payment claim included an excluded amount. On a review, the review adjudicator is bound by the findings of fact made by the adjudicator. The task on review is to determine, on the basis of the facts as found by the adjudicator at first instance, whether the payment claim includes an excluded amount. However, it is not open for a review adjudicator to overturn any of the other findings of fact as found by the adjudicator at first instance, because to do so would introduce a further and impermissible ground of review, namely that the adjudicator at first instance erred in making the findings in relation to those other facts.

257 In the course of determining this question, the review adjudicator must only consider the following matters, and these matters only:

(a) the provisions of the Act and any regulations made under the Act;

(b) the provisions of the construction contract from which the application arose; and

(c) the information provided by the authorised nominating authority which is listed under s.28H, namely all of the material which was before the adjudicator at first instance and the adjudication determination: s.28I (2) and s.28H (2).

The review adjudicator is prohibited from taking into account (a) any excluded amount; or (b) any other matter that is prohibited by the Act from being taken into account: s.28I(3). Accordingly, on a review, the review adjudicator is prohibited from taking into account any other material that was not before the adjudicator at first instance and beyond the reasons for determination. However, if the material falls within the description of the items listed in s.28H, the review adjudicator may take that material into account, even though it appears not to have been considered by the adjudicator at first instance on a reading of the reasons for the adjudication determination.

258 The point is well illustrated in this case. The adjudicator at first instance found as a fact that the construction contract between the parties was oral, and arose from the discussion between the parties which occurred on 12 September 2008. The adjudicator called this the “Arrangement of 12 September 2008”. The adjudicator then found as another fact that the detailed quotation submitted by the claimant dated 6 June 2007, was not part of the construction contract. He also found as a fact that the deed prepared and submitted by the respondent to the claimant on 21 November 2007, was similarly not part of the construction contract. On this basis he was able to make a further finding of fact that neither of the mediation clauses contained in those documents comprised part of the construction contract. These were findings of fact which could not be disturbed on an adjudication review, because to do so would be to introduce a further and impermissible ground of review, namely that the adjudicator erred in finding that the construction contract did not include the terms of the quote or the deed. These finding of fact were used by the adjudicator in his reasoning that the construction contract did not contain a “method of resolving disputes under the contract” within the meaning of s.10A(3)(d)(ii), and on this basis at least, the payment claim did not include an excluded amount.

259 There was therefore no necessity for the review adjudicator in this case to have embarked on a detailed interpretation and characterisation of the mediation clauses included in the quotation and the deed in the course of his review determination. He was bound to proceed in his review on the basis as found by the adjudicator, that those clauses were never part of the construction contract in question.

260 A number of the Grounds of review pressed by  Grocon  touched upon or arose from the issue as to what constituted the construction contract between the parties. There was no need for the review adjudicator to have engaged in a re-consideration of what constituted the construction contract. To do so would have involved considering a ground of review which was not open for him to consider. Nevertheless, he did engage in this exercise and independently arrived at the same conclusion as the adjudicator, in finding that the construction contract was constituted entirely by the conversation between the parties conducted on 12 September 2008, and that neither the claimant’s tender of 6 June 2007 or the respondent’s draft deed delivered 21 November 2007 comprised the contract or any part of it. These findings of the review adjudicator, and the process of reasoning he used to arrive at his conclusion, although technically beyond his power and irrelevant, having arrived at the same conclusion as the adjudicator at first instance, his approach did not taint the rest of his reasons with regard to the issue he was charged to determine, namely whether the claimant’s payment claim included or was comprised of an “excluded amount” as defined by the Act.

261 With these observations in mind, I deal with each of the Grounds relied upon by  Grocon  in the judicial review.

262 Ground 1 states:

Ground 1: Contrary to sections 10A and 10B of the Act, it was not open to Davenport to find, and he erred by finding, that the payment claim dated 24th April 2009 arose in respect of claimable variations and/or did not include excluded amounts in circumstances where:

Each of  Grocon  and PCJV contended before him that the relevant construction contract was in writing;

Each of the said contended for contracts included a dispute resolution method complying with section 10A(3)(d)(ii) of the Act;

The original consideration agreed for the construction contract was $1,550,000 (plus GST) and the payment claim dated 24th April 2009 claimed variations of $544,841 in total; and

Where  Grocon  had already paid to PCJV, inclusive of agreed variations, the sum of $2,482,869 (plus GST).

263 Ground 1 may be despatched shortly.  Grocon  by this ground seeks to put in issue the construction contract and the purported findings of the review adjudicator in relation to it.

264 As I have already found, it was not open to the review adjudicator to revisit the findings made by the adjudicator on the issue. To the extent that he did seek to review those findings, the review adjudicator’s reasons in this respect were surplusage. In any event he confirmed the findings of the adjudicator at first instance in relation to the construction contract, and accordingly, the balance of the reasoning of the review adjudicator in respect of the issue which he was confined to consider, namely whether the claimant’s payment claim included or comprised an “excluded amount”, was not affected.

265 Ground 2 of the  Grocon  judicial review is in the following form:

Ground 2: The purported findings made by Davenport at paragraphs 33 to 36 of the Davenport review determination to the effect that  Grocon  could not at the same time argue that the alleged work which  Grocon  claimed was a variation was not actually carried out, were contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, were not open to him and/or constituted jurisdictional error.

266  Grocon  submitted, and correctly so, that it was entitled at law to make contentions in the alternative in its submissions to the adjudicators. However,  Grocon  was not prevented by Davenport from making alternative submissions. In paragraphs [33]–[36] of his reasons, the review adjudicator was merely seeking to highlight a difficulty he perceived for the argument Grocon  was seeking to put which arose from the alternative submissions it had advanced. However, I have considerable difficulty with the reasoning of the review adjudicator on this point. The problem, I think, arose from the definition of a “variation” found in s.10A of the Act. Both of the classes of claimable variations specified in the section relate to “work that has been carried out or goods and services that have been supplied”: s.10A(2)(a) and (3)(a). Section 10B, which deals with “excluded amounts”, includes in the definition of that term “any amount that relates to a variation of the construction contract that is not a ‘claimable variation’”: s.10B(2)(a).  Grocon  was seeking to put a case that the whole of the sum constituted by PCJV’s payment claim was an excluded amount, and therefore pursuant to s.10B(1) should not have been taken into account when calculating the amount of the progress claim. In order to make out this case,  Grocon  sought to establish that the amount claimed by PCJV was not a “claimable variation”. In order to achieve this,  Grocon  also sought to establish that the work to be done pursuant to the variation had not been done or the goods and services (if any) had not been supplied, and as such would not be a ‘claimable variation’ pursuant to s.10A(2)(a) and (3)(a), and therefore was an “excluded amount” pursuant to s.10B(2)(a). This is precisely what  Grocon  submitted to the review adjudicator. However, he took the view, erroneously in my opinion, that the statutory definition of “variation” in s.4 of the Act, as applied to s.10B(2)(a) of the Act (the excluded amounts provision), meant that “variation” as used in that sub-section applied only to work that had been done or goods and services which had been supplied. However, the s.4 definition of variation under the Act does not say that. It provides:

Variation in relation to a construction contract, means a change in scope of the construction work to be carried out , or the related goods and services to be supplied , under the contract. [Emphasis added]

267 The result is that the observation made by the review adjudicator, to the effect that  Grocon  could not have it both ways, was a comment which was, in my opinion, misplaced. Nevertheless, it did not matter. This is because the adjudicator at first instance in fact found that the claimant had carried out the work in question. Further, the review adjudicator, correctly recognising the limits of his jurisdiction, made the same finding, when he observed that:

I don’t think it is open to me to find that work which the Adjudicator found had been carried out was not, in fact, carried out. Section 28B(3) of the Act provides that an application for review can only be made on the ground that the Adjudicated amount is an excluded amount.

268 Accordingly, the comment of the review adjudicator which is the subject of Ground 2 of  Grocon  ’s judicial review application, is surplusage. On the facts as found by the adjudicator at first instance, he rejected  Grocon  ’s contention that the relevant work had not been done. His comment did not affect his final conclusion that the sum claimed by PCJV was not an excluded amount, and no error of law on the face of the record or jurisdictional error, or warrant for a declaration of invalidity, has been demonstrated.

269 Ground 3 of the  Grocon  judicial review is in the following form:

Ground 3: The purported findings made by Davenport at paragraphs 43 to 48 of the Davenport review determination that a mandatory contractual dispute resolution method requiring the parties to mediate disputes did not comply with section 10A(3)(d)(ii) of the Act, were contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, were not open to him and/or constituted jurisdictional error.

270 For the reasons already expressed, the purported construction of the mediation clause undertaken by Davenport was irrelevant and surplusage. The alleged mediation clause was found by the adjudicator at first instance to have never been part of the construction contract.

271 It is irrelevant whether or not Davenport’s conclusion as to the construction of the mediation clause is correct. He arrived at the same conclusion as the adjudicator at first instance on the issue, to the effect that the clause was not “a method of resolving disputes under the contract” within the meaning of s.10A(3)(d)(ii). The result would have been the same had the review adjudicator merely determined, as he should have, that no mediation clause existed at all in the construction contract within the meaning of s.10A(3)(d)(ii). Consequently, the further reasoning of the review adjudicator on the question before him to decide, was not affected. Applying the reasoning in Bond referred to above, the findings of the review adjudicator in the respects complained of by  Grocon  did not contribute to the decision. That decision must have been the same regardless of the error. It has not been shown that even if there was an error of law involved in the decision, which in any event I have not found to be the case, that the decision may have been any different if the error had not occurred.

272 Ground 4 of the judicial review pressed by  Grocon  is expressed as follows:

Ground 4: The purported findings by Davenport at paragraph 68 of the Davenport review determination to the effect that  Grocon  was impugning its own evidence in the adjudication and the sworn evidence of Steve Richardson by relying on PCJV’s allegations as to the form of the contract between the two parties, was contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, was not open to him and/or constituted jurisdictional error.

273 In the course of argument before the review adjudicator as to what constituted the construction contract,  Grocon  relied in part upon what it contended were admissions made by PCJV in court documents which it had filed in the Supreme Court proceedings, particularly Mr Cocciardi’s affidavit sworn 17 April 2009, which it was said evidenced PCJV’s admission that its tender dated 6 June 2007 constituted the written construction contract between PCJV and  Grocon  . In dealing with this issue in his reasons, Davenport said:

[67] However, in the adjudication the respondent relied upon the affidavit of Mr. Richardson. Mr. Richardson does not say that the claimant’s tender of 6/6/07 was accepted. At [23] of his affidavit he says:

I also note that  Grocon  never accepted Cocciardi’s draft contract dated June 2007 which was prepared by Cocciardi prior to its incorporation, and as alleged in Cocciardi’s letter to  Grocon  dated 18th December 2008 more fully referred to below.

[68] In this review, the respondent is, in effect, impugning its own evidence in the adjudication and the sworn evidence of Mr. Richardson in the Supreme Court.

274  Grocon  now contends that it was entitled at law to advance contentions in the alternative and to rely upon admissions made by PCJV against PCJV’s own interest, particularly in circumstances where Mr Cocciardi in his affidavit sworn 17 April 2009 deposed to the tender document constituting the written contract between PCJV and  Grocon  . It also contends that the finding made by Davenport at paragraph [68] of his reasons “was contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, was not open to him and/or constituted jurisdictional error”.

275 These submissions do not have substance. First, the matters raised by  Grocon  before the review adjudicator were irrelevant, because the review adjudicator had no power to determine the question as to what constituted the construction contract. He was bound by the findings of the adjudicator at first instance, and there was no valid ground of review before him to re-visit those findings. Second, even though the review adjudicator permitted submissions on those matters from both parties, he did not stop  Grocon  from fairly presenting its case on the matter and from relying on such evidence as it wished in seeking to make out its case, including making reference to what it contended where admissions against interest on the part of PCJV. Third, in paragraphs [67]-[68], the review adjudicator alludes to, what appeared to him, a contradictory position assumed by  Grocon  in the adjudication and the Supreme Court proceeding. Whether or not this is so, the finding has not been shown to have affected the determination of Davenport as to what constituted the construction contract, or any other finding made by him. Fourth, if in fact there was evidence which justified the inference drawn by the adjudicator in paragraphs [67]-[68] of his reasons, the comment would be justified. If there was not, as Mason CJ said in Bond, citing Reg v The District Court; Ex parte White:

To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law.

276 Ground 5 of the judicial review was:

Ground 5: The purported findings made by Davenport at paragraph 78 of the Davenport review determination that by PCJV’s reference to “the September 2008 variation” it was referring to a change in the inchoate arrangement between PCJV and  Grocon  , was contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, was not open to him and/or constituted jurisdictional error.

277 In its submissions to this Court,  Grocon  challenged the finding complained of on the basis that the review adjudicator fell into error in making the finding that prior to September 2008 PCJV had performed work pursuant to an “inchoate arrangement”. It says that prior to September 2008 there was “not some inchoate agreement, but ... [a] clear agreement”.

278 The description “inchoate agreement” used by the review adjudicator to describe the working arrangement between the parties prior to 12 September 2008, was in accordance with the findings of the adjudicator at first instance. The review adjudicator was bound by those findings of fact. There was no error of law in him describing those findings in the way he did.

279 Finally, Ground 6 of the  Grocon  judicial review was expressed as follows:

Ground 6: Insofar as Davenport purported to uphold the O’Brien determination in respect of the issues arising under sections 10A and 10B of the Act as to whether the payment claim dated 24th April 2009 related to claimable variations and/or did not include excluded amounts, the Davenport review determination:

(a) Is void by operation of section 23(2B) of the Act;

(b) Was contrary to the Act and demonstrates an error of law on the face of the record constituted by the Davenport review determination and/or the O’Brien determination;

(c) Tainted by jurisdictional error; and/or

(d) Was made in breach of his obligation to accord procedural fairness to  Grocon  ,

and ought to be quashed and/or declared void.

280 The submission made by  Grocon  under Ground 6 was essentially that if the O’Brien determination should be declared “void or invalid, or ... [be] quashed, then it follows that the confirming adjudication must fall too”. I agree. But having found the O’Brien determination to be valid, the consequence contended for does not follow.

Conclusion as to the Grounds for Judicial Review of the Davenport Review Determination

281 In its payment schedule,  Grocon  alleged that the whole of the amount claimed in the payment claim by PCJV was an excluded amount and therefore could not be taken into account when calculating the amount of the progress payment under s.10B(1), namely $544,841.00 [including GST].  Grocon  said in its submissions to the adjudicator that the sum claimed in the payment claim “arises from variations to the original contract price of $1,550,000 plus GST, which variations were neither approved nor agreed by  Grocon  , and  Grocon  alleges that the whole of the amount claimed of $544,841.00 is an excluded amount”. The adjudicator rejected  Grocon  ’s submission and determined that the whole of the claimed amount was not an excluded amount.

282 Davenport, as the review adjudicator, also concluded that he was not satisfied that the payment claim included an excluded amount. This was the only finding of fact which the review adjudicator was entitled to make.

283 There was no jurisdictional error arising from this finding. The legislation, in my opinion, intended to confer findings of fact of this kind under s.10A and s.10B of the Act to an adjudicator and a review adjudicator for determination, such that even if an error was made in making the findings, an adjudicator would remain within jurisdiction. In other words, the adjudicator had jurisdiction to make even wrong findings of this type. Further, for these reasons, it could not be said that in making this finding the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

284 The record for the purpose of considering non-jurisdictional error of law, in this case, comprises the formal documents initiating and defining the matter for adjudication under the Act at first instance. This consists of the payment claim made under s.14 of the Act and the payment schedule provided by the respondent under s.15 of the Act. Added to this is the decision of the adjudicator at first instance which includes the determination of the adjudicator and the reasons for the determination. Further, all of the submissions filed by the parties constitute part of the record because they assist to define the issues in the adjudication. In relation to the review determination, added to these documents are the adjudication review application of  Grocon  and the other submissions prepared and delivered by the parties for the adjudication review because they assist in defining the issues for the review.

285 As to any error on the face of the record, having considered the Davenport review determination, the documents which comprise the record for the purposes of certiorari, and each of the Grounds for judicial review relied upon by  Grocon  , I can see no error of law on the face of the record which can be made out on the plaintiff’s grounds for judicial review.

286 Accordingly, I find that none of the grounds for judicial review of the Davenport review determination have been made out.

Orders

287 I will dismiss the plaintiff’s proceeding and hear the parties on the question of costs.

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