JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM : COMMERCIAL & CIVIL
ACT : CONSTRUCTION CONTRACTS ACT 2004 (WA)
CITATION : PERRINEPOD PTY LTD and GEORGIOU BUILDING PTY LTD [2010] WASAT 136
MEMBER : JUDGE T SHARP (DEPUTY PRESIDENT) MR T CAREY (MEMBER)
HEARD : 3 SEPTEMBER 2010
DELIVERED : 29 SEPTEMBER 2010
FILE NO/S : CC 991 of 2010
BETWEEN : PERRINEPOD PTY LTD
Applicant
AND
GEORGIOU BUILDING PTY LTD
Respondent
Catchwords:
Construction Contracts Act 2004 (WA) - Whether right of review extends to decision rejecting submissions for the adjudication to be dismissed
Legislation:
Construction Contracts Act 2004 (WA), s 6, s 26, s 31, s 31(2)(a), s 31(2)(a)(iv),
s 31(2)(b), s 46, s 46(1), s 46(2)
State Administrative Tribunal Act 2004 (WA), s 29(3)(c)(i), s 29(3)(c)(ii)
Result:
The application is dismissed
Category: B
Representation:
Counsel:
Applicant : Mr A Metaxas
Respondent : Mr S Ellis
Solicitors:
Applicant : Metaxas & Hager
Respondent : Tottle Partners
Case(s) referred to in decision(s):
Match Project Projects Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134
Match Projects Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134
O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19
Silent Vector Pty Ltd T/As Sizer Builders and Squarcini [2008] WASAT 39
REASONS FOR DECISION OF THE TRIBUNAL :
Summary of Tribunal's decision
1 The applicant applied for a review of a decision of an adjudicator under the Construction Contracts Act 2004 (WA). The applicant considered that the adjudicator ought to have dismissed the application on the ground that the application was too complex. The adjudicator declined to dismiss the application and went on to make a determination on the merits.
2 The Tribunal concluded that its right of review was limited to a review of a decision of an adjudicator to dismiss an application without making a determination on the merits. That conclusion was consistent with the reasoning applied in Match Projects Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134.
3 The application was therefore dismissed.
Background and issue for determination
4 This is an application for review brought under s 46(1) of the Construction Contracts Act 2004 (WA) (CC Act). The review relates to an adjudication determination made by Mr RKS Davies on 16 July 2010. The application is made on the basis that it was not possible for the adjudicator to make a fair determination of the dispute between the applicant and the respondent, on the grounds set out in s 31(2)(a)(iv) of the CC Act, and therefore that the adjudicator should have dismissed the adjudication application without making a determination of its merits.
5 On 25 July 2010, the Tribunal made the following direction:
There will be heard as a preliminary issue the question of whether the Tribunal has jurisdiction under s 46(1) of the Construction Contracts Act 2004 in a case other than where the adjudicator has dismissed the application in accordance with s 41(2)(a) Construction Contracts Act 2004 .
6 As the matter was argued before us, the parties agreed that the preliminary issue for determination is whether it is within the jurisdiction of the Tribunal to review the adjudicator's decision made pursuant to s 31(2)(a) of the CC Act to not [emphasis added] dismiss the adjudication application
7 The Tribunal gave its decision on this issue on 3 September 2010 and the applicant requested that the Tribunal give its reasons in writing.
8 Those reasons and the Tribunal's decisions are as follows:
Statutory framework
9 Unless otherwise stated, all references to particular sections are references to sections of the CC Act.
10 Section 6 sets out how a payment dispute arises:
Payment dispute
For the purposes of this Act, a payment dispute arises if -
(a) by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed;
(b) by the time when any money retained by a party under the contract is due to be paid under the contract, the money has not been paid; or
(c) by the time when any security held by a party under the contract is due to be returned under the contract, the security has not been returned.
11 Section 26 governs the manner in which an application to have a payment dispute is adjudicated:
Applying for adjudication
(1) To apply to have a payment dispute adjudicated, a party to the contract, within 28 days after the dispute arises or, if applicable, within the period provided for by section 37(2)(b), must -
(a) prepare a written application for adjudication;
(b) serve it on each other party to the contract;
(c) serve it -
(i) if the parties to the contract have appointed a registered adjudicator and that adjudicator consents, on the adjudicator;
(ii) if the parties to the contract have appointed a prescribed appointor, on that appointor;
(iii) otherwise, on a prescribed appointor chosen by the party; and
(d) provide any deposit or security for the costs of the adjudication that the adjudicator or the prescribed appointor requires under section 44(8) or (9).
(2) The application -
(a) must be prepared in accordance with, and contain the information prescribed by, the regulations;
(b) must set out the details of, or have attached to it -
(i) the construction contract involved or relevant extracts of it; and
(ii) any payment claim that has given rise to the payment dispute; and
(c) must set out or have attached to it all the information, documentation and submissions on which the party making it relies in the adjudication.
(3) A prescribed appointor that is served with an application for adjudication made under subsection (1) must comply with section 28.
12 Section 31 describes the adjudication function and is central to the issue to be determined. It provides as follows:
Adjudicator's functions
(1) In this section -
prescribed time means -
(a) if the appointed adjudicator is served with a response under section 27(1) - 14 days after the date of the service of the response;
(b) if the appointed adjudicator is not served with a response under section 27(1) - 14 days after the last date on which a response is required to be served under section 27(1).
(2) An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a) -
(a) dismiss the application without making a determination of its merits if -
(i) the contract concerned is not a construction contract;
(ii) the application has not been prepared and served in accordance with section 26;
(iii) an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or
(iv) satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;
(b) otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine —
(i) the amount to be paid or returned and any interest payable on it under section 33; and
(ii) the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.
(3) If an application is not dismissed or determined under subsection (2) within the prescribed time, or any extension of it made under section 32(3)(a), the application is to be taken to have been dismissed when the time has elapsed.
13 Section 46, which is also central to the issue for determination provides as follows:
Review, limited right of
(1) A person who is aggrieved by a decision made under section 31(2)(a) may apply to the State Administrative Tribunal for a review of the decision.
(2) If, on a review, a decision made under section 31(2)(a) is set aside and, under the State Administrative Tribunal Act 2004 section 29(3)(c)(i) or (ii), is reversed the adjudicator is to make a determination under section 31(2)(b) within 14 days after the date on which the decision under section 31(2)(a) was reversed or any extension of that time consented to by the parties.
(3) Except as provided by subsection (1) a decision or determination of an adjudicator on an adjudication cannot be appealed or reviewed.
Issue for determination
Is it within the jurisdiction of the Tribunal to review the adjudicator's decision made pursuant to s 31(2)(a) to not dismiss the adjudication application?
14 The applicant considers that the adjudicator should have been 'satisfied that it is not possible to fairly make a determination because of the complexity of the matter' (s 31(2)(a)(iv)) and that therefore the adjudicator should have dismissed the application without making a determination of its merits.
15 The applicant contends that it is thus '[a] person who is aggrieved by a decision made under s 31(2)(a)' and therefore may 'apply to the State Administrative Tribunal for a review of the decision' (s 46(1)).
16 The issue which requires determination arises out of the applicant's second contention, namely, that it is within the jurisdiction of the Tribunal to review an adjudicator's decision to not dismiss the adjudication application.
17 Specific consideration of the issue which we must determine was given in Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134 ( Match ). There, the Tribunal concluded for the reasons at [43] - [55] that on a proper construction of the legislation, s 46(1) refers to only a decision made under s 31(2)(a), being a decision to dismiss the adjudication application on any of the grounds there stated.
Matters raised by the applicant
18 The applicant considers that Match was incorrectly decided on the basis of the following arguments:
The applicant's first argument
19 The applicant in oral argument maintains the view that the Tribunal is bound by the decision in O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 ( O'Donnell ).
20 In O'Donnell , Beech J expressed the view at [126] that on a proper construction of s 46(1):
… there will be a 'decision' under s 31(2)(a) for the purposes of s 46(1), if the adjudicator:
(a) dismisses the application without making a determination of its merits in reliance on s 31(2)(a); or
(b) rejects a submission of a respondent to an adjudication application that the application should be dismissed under s 31(2)(a).
The Tribunal's response
21 The O'Donnell decision was very carefully considered by the Tribunal in Match . The Tribunal concluded at [42] that the opinions expressed in O'Donnell constitute dicta and should be given great weight, but the Tribunal did not consider that it was bound by those opinions.
22 For the reasons set out in Match at [41] we respectfully agree with that conclusion.
The applicant's second argument
23 The applicant in oral argument places significance on the use of the word 'person' in s 46(1) and suggests that if the word 'person' is in fact limited to an 'applicant', a defined term under the CC Act, then why was the term 'applicant' not used?
The Tribunal's response
24 With respect, we consider that the opening phrase in s 46(1) needs to be read as a whole, namely, '[a] person who is aggrieved by a decision'. If we accept the reasoning in Match at [43] - [45], then the word 'decision' in s 46(1) can only mean a decision to dismiss an application. In any event, we do not agree that an application to the Tribunal under s 46(1) may only be made by the 'applicant' as defined under the CC Act. It is not inconceivable that both parties in relation to an adjudication may wish to have a payment dispute determined by an adjudicator. In circumstances where the adjudicator has of his own volition dismissed an application on one of the grounds set out in s 31(2)(a) it would be open to either party to the contract to apply for a review of that decision under s 46(1).
The applicant's third argument
25 The applicant argues that there are circumstances in which an adjudication claim might comprise a number of components and that this was somehow inconsistent with the interpretation of s 46 adopted in Match .
The Tribunal's response
26 There will clearly be circumstances where a single application involves a number of components which must be dealt with differently. For example, the claimant may seek to raise a number of claims in an adjudication, some of which give rise to payment disputes more than 28 days before the application was made, and some of which gave rise to disputes less than 28 days prior to the application. This was the case in Silent Vector Pty Ltd T/As Sizer Builders and Squarcini [2008] WASAT 39 In such cases, a decision dismissing part of the application under s 31(2)(a) is required, together with a determination on the merits under 31(2)(b) of the balance of the application. This is entirely consistent with the operation of s 46(2) as provided in Match . Section 46(1) and s 46(2) apply to the extent that the application was disposed of by a decision under s 31(2)(a). To the extent that the application was disposed of by determination under s 31(2)(b), the matter could not be sent back to the adjudicator to remake the determination and neither s 46(1) nor s 46(2) apply.
The applicant's fourth argument
27 The applicant points out that in Match , the Tribunal gave particular consideration to s 46(2), which requires that if a decision made under s 31(2)(a) is set aside and, under s 29(3)(c)(i) or s 29(3)(c)(ii) of the State Administrative Tribunal Act 2004 (WA) (SAT Act), is reversed, the adjudicator is to make a determination under s 31(2)(b). The Tribunal in Match found that, on its face, this supports a construction that a reference in s 46(1) to a decision made under s 31(2)(a) can only be to a decision made to dismiss the adjudication application. The Tribunal observed that it would be absurd to require the adjudicator to make a determination on the merits, in the face of a finding that the application should have been dismissed under s 31(2)(a) but was not.
28 The applicant argues that the adjudicator could in fact make a determination on the merits as is required under s 31(2)(b), if the decision not to dismiss an application has been reversed. That determination would, as we understand the applicant's argument, comprise a determination to not make a determination under s 31(2)(b).
The Tribunal's response
29 With respect, we do not agree with this argument. If the substituted decision is to dismiss the application, 'without making a determination of its merits' as required by s 31(2)(a), then we cannot see how the adjudicator could make a determination under s 31(2)(b) to somehow not determine the application on its merits. That is the absurdity to which the Tribunal alluded in Match at [43].
Conclusion
30 We respectfully consider that Match is correctly decided. Consequently, the application which is before us must be dismissed.
Order
31 The Tribunal accordingly ordered on 3 September 2010 that:
1. The application for review of the decision of the adjudicator reflected in the determination made on 16 July 2010 is dismissed.
I certify that this and the preceding [31] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUDGE T SHARP, DEPUTY PRESIDENT