[2011] WASC 80

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS

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

CORAM : CORBOY J

HEARD : 7 OCTOBER 2010, 14 & 22 MARCH 2011

DELIVERED : 29 MARCH 2011

FILE NO/S : CIV 2320 of 2010

BETWEEN : THIESS PTY LTD

Plaintiff

AND

MCC MINING (WESTERN AUSTRALIA) PTY LTD

Defendant

Catchwords:

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

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

Legislation:

Construction Contracts Act 2004 (WA)

State Administrative Tribunal Act 2004 (WA)

Result:

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

Category: B

Representation:

Counsel:

Plaintiff : Mr B Dharmananda

Defendant : Mr M J Feutrill

Solicitors:

Plaintiff : Minter Ellison

Defendant : Allens Arthur Robinson

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

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

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

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223

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

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

Buck v Bavone ((1976) 135 CLR 110

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

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

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

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

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

Foley v Padley (1984) 154 CLR 349

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

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

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

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

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

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

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

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

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

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

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

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

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

Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369

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

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

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

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

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

R v Hickman; Ex parte Fox (1945) 70 CLR 598

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

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

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

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

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

Silent Vector Pty Ltd and Squarcini [2008] WASAT 39

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

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

CORBOY J :

Introduction

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

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

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

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

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

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

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

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

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

MCC argues that:

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

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

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

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

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

The proceedings commenced by MCC following the Determination

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

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

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

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

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

Section 46 provides that:

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

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

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

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

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

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

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

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

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

The approach that has been taken to determining this application

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

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

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

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

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

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

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

(c) does the adjudicator's jurisdiction extend to wrongly deciding that the requirements of s 26 have been satisfied;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The approach taken by the parties

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

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

33 In its written submissions, MCC contended that:

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

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

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

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

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

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

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

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

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

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

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

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

(a) the nature of the application;

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

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

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

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

O'Donnell Griffin [2009]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Match Projects and MCC Mining and Thiess

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

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

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

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

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

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

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

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

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

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

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

A question arises whether any non-compliance with any of these requirements has the effect that a purported determination is void, that is, is not in truth an adjudicator's determination. That question has been approached in the first instance decision by asking whether an error by the adjudicator in determining whether any of these requirements is satisfied is a jurisdictional or non-jurisdictional error. I think that approach has tended to cast the net too widely; and I think it is preferable to ask whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator's determination …

The legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination: cf Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 390 - 391. What was intended to be essential was compliance with the basic requirements …

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 46 CC Act

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

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

80 Privative clauses are to be construed according to their proper meaning ascertained in their legislative context: see Re Harley White; Ex parte Hutt [2004] WASC 46 [13] (Le Miere J). However, privative clauses are strictly construed as it is 'presumed that the parliament does not intend to cut down the jurisdiction of the courts save to the extent that the legislation in question expressly so states or necessarily implies':

Plaintiff S157/2002 [72]. So construed, I consider that s 46(3) does not prevent an aggrieved respondent from seeking prerogative relief in respect of a decision by an adjudicator to refuse to dismiss an adjudication application under s 31(2)(a).

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

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

The evidence in the application

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

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

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

The material that the court can consider

86 An issue arose in the hearing of the application over what material the court could consider in ascertaining whether MCC had demonstrated a good reason why Thiess should not be given leave to enter judgment.

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

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

The payment provisions of the Contract

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

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

(b) The superintendent was required within 14 days after receiving a progress claim to issue to MCC and Thiess a progress certificate evidencing the superintendent's opinion of the moneys due from MCC to Thiess pursuant to the progress claim and a further certificate evidencing the superintendent's assessment of retention moneys and moneys due from Thiess to MCC (GC 37.2).

(c) If Thiess did not make a progress claim in accordance with item 28, the superintendent might issue a progress certificate with details of the calculations. He was obliged in that circumstance to issue a certificate stating his assessment of retention moneys and moneys due by Thiess to MCC (GC 37.2).

(d) If the superintendent did not issue a progress certificate within 14 days of receiving a progress claim in accordance with GC 37.1, the progress claim was deemed to be the relevant progress certificate (GC 37.2).

(e) Further (by GC 37.2):

[MCC] shall within 14 days after receiving both such certificates, or within 21 days after the superintendent received the progress claim, pay to [Thiess] the balance of the progress certificate after deducting retention moneys and setting off such of the certificate in par (b) as the principal elects to set off.

The reference to 'both such certificates' in GC 37.2 was to the two certificates to be issued by the superintendent - the progress certificate and the certificate evidencing his assessment of retention moneys and moneys due from Thiess to MCC.

89 The adjudicator found that GC 37 was amended following advice by MCC in May 2009 that it was unable to provide a bank guarantee as required under the Contract [5]. It will be necessary to further consider the adjudicator's findings regarding those arrangements later in these reasons.

90 The adjudicator also found that a practice developed between the parties with respect to payment for variations and cost plus works. Those findings reflect evidence given by Mr Welfare at pars 14 - 21 of his declaration ('AT-33') and Mr Dewee at pars 10 - 12 of his declaration ('AT-34'. I will not reproduce the evidence concerning the process but the following matters are to be noted:

(a) Documents such as daily time sheets for labour, plant and site facilities and weekly summaries were provided to MCC for the relevant progress claim period. Thiess would also submit 'approval request' forms to MCC in respect of cost plus items.

(b) A draft progress claim was also submitted to MCC for approval at the end of the month and upon receipt of the draft, a representative of MCC would review and approve the draft progress claim and return it to Thiess. Thiess would then submit the draft progress claim as signed by both parties and a tax invoice. Those documents together formed the progress claim for the claim period.

(c) Mr Welfare and Mr Dewee did not refer to progress claims being submitted to the superintendent or to the issue of a progress certificate by the superintendent. Rather, the parties agreed between them the amount of the progress claim after MCC had been provided with an opportunity to review the draft and supporting documents. There was, however, evidence that the superintendent (who was employed by MCC) was the person to whom Thiess submitted unapproved items for assessment (see, for example, Thiess' letter dated 3 December 2009, 'AT-9'). There was no evidence that the superintendent issued progress certificates under the practice that was adopted by the parties.

(d) The progress claim that was issued did not include any claim for payment in respect of items that were not agreed between Thiess and MCC. Rather, payment for those items was deferred pending agreement. The unresolved and deferred items were known as 'unapproved items'. According to Mr Welfare, they were listed in the progress claims as such 'so that each party was aware that ongoing discussion about those items was continuing' (par 15 of his declaration).

(e) As Thiess and MCC finalised and agreed unapproved items, they would be claimed by Thiess in the next progress claim under a section entitled 'previous unapproved items approved in this claim'.

91 It should be noted that Mr Yue did not give evidence in his statutory declaration on the arrangements for paying progress claims. His evidence was directed to establishing that the 17 May Letter merely formed a further step in a continuing negotiation over the claims to which the letter referred, the parties having agreed at a meeting held in April 2010 that Thiess would provide further information about those claims. According to his evidence, Mr Yue was waiting for that information to be able to assess, as superintendent, the items referred to in the 17 May Letter.

The 17 May Letter

92 The adjudicator found that Thiess began pressing MCC for resolution of outstanding unapproved items from about November 2009. It appears from the declarations made by Mr Welfare (at par 20) and Mr Dewee (at par 11) that this coincided with a breakdown in the practice for processing variations and cost plus items. Mr Welfare stated that MCC began to default in its payment obligations in November 2009 (par 18); Mr Dewee stated that from about November or December 2009 MCC ceased approving daily time sheets (par 11). Letters were exchanged and meetings held through to May 2010 in an attempt to resolve payment for the items. MCC engaged as a consultant a lawyer, Mr Riley, to assess the items on its behalf during this period (see the Determination at [6]).

93 The adjudicator found that at a meeting held on 9 April 2010, Mr Riley 'expressed certain views as to the validity of Thiess's claims, but materially, asked to see Thiess's material in support of its claim'. He commented that, 'on the evidence of Mr Dewee and Mr Welfare, it was apparent from the negotiations that MCC was intent on avoiding payment on Thiess's claim, with little regard for the merits' [7].

94 Further and significantly, the adjudicator found that:

(a) immediately after the 9 April meeting, Mr Dewee told Mr Riley that he would provide a 'full payment claim' with supporting documents and Mr Riley stated that he would assess the unapproved items after the material had been provided [7];

(b) Mr Dewee then prepared a 'comprehensive claim', which was the 17 May Letter, comprising a covering letter, summaries of Thiess' claim with respect to each unapproved item, two lever arch files of supporting documents and a disc containing electronic copies of the summaries [8].

95 There were 28 unapproved items referred to in the 17 May Letter. MCC did not dispute that the letter concerned unapproved items.

Was the 17 May Letter a 'payment claim'?

96 In addition to the findings that he made concerning the amended payment arrangements, the practice adopted by the parties for agreeing progress claims and the 17 May Letter, the adjudicator found that:

(a) The 17 May Letter was 'for all practical purposes' a claim for payment of the sum sought even though the letter and accompanying material had been submitted in response to a request from Mr Riley for supporting documents. The letter was not just another step in the negotiations over payment for the unapproved items. It was clear from 'all of Thiess' evidence' that negotiations for 'resolution of the claims for payment of the Unapproved Items' had been conducted for some months and 'they' (presumably, the claims for payment of the items) had been submitted individually and dealt with on a piecemeal basis. The claim only 'coalesce[d] into a single claim' for approximately $8.5m during the meetings and negotiations around April 2010. The involvement of Mr Riley was significant in that context as he had been engaged to resolve the issue of payment of the unapproved items [14].

(b) The practice that had developed between the parties of agreeing items in advance of a progress claim could not 'displace Thiess's right to submit a claim that had not been agreed in advance' [14].

(c) Further, Thiess submitted its claim on 17 May 2010 'with the expectation and the understanding, shared by MCC, that it would be assessed as required under the contract and a certificate issued by the superintendent in due course' [14].

97 MCC's submission that the 17 May Letter did not constitute a payment claim within the meaning of the CC Act rested on the following propositions:

(a) Thiess had made payment claims in respect of the unapproved items by some time well before the 17 May Letter. Payment claims for most of the unapproved items were said to have been made by January 2010 (par 53, MCC's written submissions dated 4 October 2010) and for all of the items by no later than 26 March 2010 (par 92, MCC's written submissions). It was said that the evidence given by Mr Welfare and Mr Dewee to the adjudicator indicated that the payment claims had been rejected or disputed by no later than 9 April 2010 so that payment disputes had arisen by that date (pars 62 - 64, MCC's written submissions).

(b) From late January 2010 onwards, the parties negotiated over resolving pre-existing claims and disputes (pars 60 and 61, MCC's written submissions). The negotiations included the various emails referred to at pars 54 - 59 of MCC's written submissions. The content of those emails demonstrated that the parties were negotiating over payment claims that had already been made for the unapproved items.

(c) The 17 May Letter was merely a further exchange in the negotiations for resolution of the pre-existing claims made by Thiess (par 60, MCC's written submissions). That was apparent from the form and content of the letter and from the communications between the parties that had preceded the letter. The letter did not constitute a 'separate, distinct and novel claim' (par 61, MCC's written submissions).

(d) The only reasonable finding open to the adjudicator was that the 17 May Letter was merely one communication in the course of negotiations over previously existing claims and disputes (par 52, MCC's written submissions, and see also par 67 in which it was contended that the only logical conclusion available on the evidence was that a payment dispute in respect of the unapproved items had arisen by no later than 9 April 2010).

98 MCC's submission as to why the 17 May Letter did not constitute a payment claim referred to emails sent by Thiess between 25 January and 21 April 2010 ('AT-24' - 'AT-26', 'AT-28' and 'AT-29'). With one exception, the submission did not refer to the communications from Thiess that are relied on to contend that the 17 May Letter contained 'recycled' claims; that is, the emails sent on and after 25 January were not the prior payment claims that were said to have been duplicated (except for an email from Thiess sent on 26 March 2010; 'AT 28). Consequently, MCC's submission generally did not identify when the payment claims were made that precipitated, and were the subject of, the negotiations. Rather, the submission focussed on the language of the emails as evidence that past payment claims must have been made and that they were the subject matter of the negotiations.

99 So, for example, an email dated 25 January 2010 ('AT-24') from Thiess to MCC concluded by stating that, 'Thiess reserves its contractual and legal rights associated with the payment of all outstanding claims'. MCC emphasised in its submissions the words, 'outstanding claims'.

100 However, the email also referred to forthcoming discussions between Thiess and MCC and advised that 'given the significant length of time that has already passed, [Thiess] expects resolution of the unapproved claims by early next week'. On the adjudicator's findings, the characterisation in the email of the claims as being 'unapproved' was consistent with the 'claims' not having been previously submitted for payment; rather, they remained to be agreed prior to being incorporated into a progress claim (on the adjudicator's findings, that procedure was only abandoned on Thiess submitting the 17 May Letter). Consequently, read in the context of the adjudicator's findings regarding the practice adopted by the parties (findings that were made on the uncontested evidence of Mr Welfare and Mr Dewee), the email is inconsistent with the proposition that by 25 January 2010 the parties were negotiating over claims that had been previously made - one of MCC's submissions being that payment claims for most of the unapproved items had been made by January 2010.

101 MCC referred to other instances where Thiess had described the items the subject of the 17 May Letter as 'outstanding claims' or 'claims'. Several points emerge from a review of the documents identified by MCC:

(a) There is an ambiguity about the use of the word 'claim' in this context having regard to the adjudicator's findings. Clearly, Thiess was 'claiming' that it was entitled to be paid for the unapproved items. Ordinarily, such a 'claim' might constitute a payment claim for the purposes of the CC Act having regard to the definition of the term 'payment claim' appearing in s 3 of the Act. However, on the adjudicator's findings the parties drew a distinction between negotiating to agree the payment of an unapproved item and Thiess making a payment claim for that item once an agreement had been reached (a payment claim for the purpose of the CC Act made by claiming the item as an 'approved item' in a progress claim). Referring to the unapproved items as 'claims' in the course of reaching an agreement for payment of those items is an ordinary use of language. On the adjudicator's findings about the practice adopted by the parties and their adherence to that practice until the 17 May Letter was submitted, the use of the word 'claim' in connection with an unapproved item in Thiess' communications was not a reference to a payment claim that had been previously made or to a payment claim that was being made in the relevant communication. Rather, the word merely referred to what Thiess asserted was its entitlement and about which it sought MCC's agreement.

(b) MCC's submissions referred to an email dated 26 March 2010 from Thiess to MCC ('AT-28'). The email referred to MCC communicating on 'the status of negotiations in regard to our outstanding claim attached'. Attached to the email was a list of items that substantially corresponded with the items the subject of the 17 May Letter. It was on the basis of this email that MCC contended that payment claims had been previously made for all of the items referred to in the 17 May Letter by no later than 26 March 2010. However, in my view the email does not contain a payment claim or provide evidence of prior payment claims having been made given the adjudicator's findings regarding the parties' practice and the explanation for the use of the word 'claims' provided in the previous paragraph.

(c) Similarly, the other communications referred to by MCC in its submissions and the references to 'claims' in the statutory declarations made by Mr Welfare and Mr Dewee do not establish that payment claims were made by Thiess prior to the 17 May Letter when considered in the context of the adjudicator's findings.

102 A further aspect of MCC's contention that the 17 May Letter was not a payment claim but merely an exchange in the course of negotiations concerns the form of the letter. It was said that the 17 May Letter was similar in form to earlier correspondence from Thiess which the adjudicator did not regard as embodying a payment claim and there was no statement in the 17 May Letter indicating that, unlike earlier correspondence, the letter was to be treated as a progress claim or a payment claim made under the Contract. Particular reference was made to an email from Thiess sent on 21 April 2010 ('AT-29'). The wording of that email was said to be similar to the letter accompanying the material that formed the 17 May Letter.

103 MCC's contention overlooks the significance of the finding made by the adjudicator about what transpired at and immediately following the meeting held on 9 April 2010 between the representatives of Thiess and Mr Riley. The adjudicator found that Mr Dewee told Mr Riley that Thiess would submit a 'full payment claim' and that Mr Riley advised that he would 'assess the unapproved items' after that material had been provided. He further found that the 17 May Letter was 'for all practical purposes' a payment claim, presumably as the letter was to be read in the context of the exchange that had occurred on 9 April 2010 and the communications between Thiess and MCC over unapproved items preceding the meeting. Finally, the adjudicator found that the 17 May Letter was submitted 'with the expectation and understanding' of the parties that it would be assessed as required under the Contract. The submission of the 17 May Letter was the culmination of the process of negotiation over the unapproved items rather than just another step in those negotiations. That was the effect of the exchange between Mr Dewee and Mr Riley on 9 April 2010.

104 It was those findings that served to distinguish the 17 May Letter from Thiess' earlier communications concerning the unapproved items. They are findings that are not challenged (nor could they be as they were based on evidence from Mr Welfare and Mr Dewee that was not contradicted).

105 In my view, the terms of the email of 21 April 2010 from Thiess ('AT-29') were consistent with the adjudicator's analysis. Although parts of the email were similar to the covering letter forming part of the 17 May Letter, there were significant differences. In particular, the email of 21 April 2010 expressly referred to the fact that the material that was incorporated into the 17 May Letter was being assembled for submission to MCC to support Thiess' 'claim'. The email continued that notwithstanding the imminent delivery of the material, Thiess would be prepared to deduct an amount from its 'claim' if MCC agreed to payment (by inference, prior to all of the supporting material being provided). As such, the email was merely a further aspect of the negotiations that the adjudicator found were brought to an end by the submission of the 17 May Letter. The adumbration in the email of the 17 May Letter is consistent with the adjudicator's reasoning as to why the letter was, and was intended to be, different in effect to the prior correspondence.

106 In my view, on the findings made by the adjudicator that are not challenged, MCC has not established a sufficiently arguable case that:

(a) The correct or preferable decision was that Thiess' adjudication application ought to have been dismissed as the 17 May Letter was not a payment claim.

(b) the Determination is liable to be set aside for jurisdictional error. I do not consider that the adjudicator's conclusion that the 17 May Letter was a payment claim was seriously irrational or so unreasonable as to be likely to attract prerogative relief.

107 Those conclusions are based on a review of MCC's submissions as to why the 17 May Letter did not contain a payment claim. However, as I indicated earlier in these reasons, MCC's submissions on why the adjudicator erred in finding that the 17 May Letter contained a payment claim did not rely on the same documents that were identified in support of its contention that the letter recycled earlier payment claims. There is an obvious overlap between the arguments as they both rely on the contention that payment claims had been made in respect of the relevant items prior to the 17 May Letter. Accordingly, I will revisit my findings on the question of whether the letter was a payment claim for the purpose of the CC Act after I have considered MCC's submissions as to why the letter contained recycled claims.

Did the 17 May Letter contain 'recycled' payment claims?

108 The argument that the 17 May Letter contained recycled claims necessarily proceeds on the assumption that the letter was a payment claim. The adjudicator rejected that argument, finding that Thiess did not expect payment of the items previously listed in progress claims as 'unapproved items' according to the practice adopted by the parties. The inclusion of such items in a progress claim was not to request payment but to ensure that the need to ultimately assess the items was not overlooked by MCC. The negotiations prior to 17 May 2010 were directed to obtaining agreement on the amount to be paid for the outstanding unapproved items prior to Thiess submitting a claim for payment. That accorded with the parties' practice. It was only in the 17 May Letter that the practice was abandoned, with Thiess submitting a claim on an 'unagreed' basis [17].

109 Neither party referred to decisions in SAT concerning 'recycled' claims. However, I note that in Silent Vector Pty Ltd and Squarcini [2008] WASAT 39 and Merym Pty Ltd and Methodist Ladies College [2008] WASAT 164, the Tribunal held that the mere repetition of a payment claim previously made could not give rise to a new payment dispute for the purpose of s 26 CC Act. That is also the position that has been adopted by the Supreme Court of the Northern Territory in respect of the Territory's legislation that is modelled on the CC Act: see A J Lucas Operations .

110 In what follows, the numbers allocated by the adjudicator in the Determination are used to refer to the items in the 17 May Letter. Items 9, 11, 15, 19 and 28 (and items 1, 12, 14, 16, 20, 21 and 23 - 27)

111 MCC submitted that payment claims for items 9, 11, 15, 19 and 28 had been made in a letter dated 3 December 2009 ('AT-9'). It was also submitted that claims in relation to items 1, 12, 14, 16, 20, 21 and 23 – 27 were 're-asserted' in the letter.

112 It was said that the total amounts for each of the items referred to in the 3 December letter were not included as 'approved' or 'unapproved' items in Thiess' December progress claims so that the 'request for payment/approval' in the letter stood outside the 'informal approval process' the adjudicator found the parties had followed up to that point in time. Consequently, the 3 December 2009 letter was to be characterised as an 'independent request/demand' for payment of the amounts itemised in the letter (pars 71 and 87, MCC's submissions).

113 The 3 December 2009 letter commenced by referring to a meeting apparently held the day before and advised that details of the 'outstanding claims' addressed during that meeting were attached. The letter then referred to various items and amounts and provided comments concerning those items in a column headed 'basis of entitlement'. The comments were said to have been made to assist the superintendent for MCC (to whom the letter was addressed) in 'evaluating and agreeing our submission'. The letter concluded, 'Thiess requests that MCC approves the above items for approval in our December 2009 claim' (emphasis added).

114 The conclusion to the letter was consistent with the adjudicator's findings that Thiess' correspondence prior to the 17 May Letter formed part of negotiations over the unapproved items, the purpose of the negotiation being to obtain agreement ('approval') on the items so that they could be incorporated into a progress claim as a claim for payment. However, MCC contends that the items referred to in Thiess' letter of 3 December 2009 were not included as 'unapproved items' in the December 2009 progress claim and that the exclusion of the items served to separate the letter from the practice that had been previously adopted by the parties. Consequently, the letter was to be considered independently of that practice and by reference to its contents, it was a payment claim.

115 The December progress claims ('AT-8') included some 'unapproved' items but it is apparent from the amounts stated in respect of those items that they did not include much or all of the amounts referred to in the 3 December 2009 letter. There are extracts from subsequent progress claims appearing elsewhere in the material attached to Mr Tang's affidavit (pages 123 - 130) which suggest that the items referred to in the 3 December 2009 letter were never incorporated into a progress claim as 'approved' or 'unapproved' items (it is difficult to reconcile the items referred to in the 3 December 2009 letter with the items listed in the December and subsequent progress claims as the only common items appear to be 'mobilisation/demobilisation of plant' and 'insurance' and the amounts claimed for those items differ between the letter and the progress claims).

116 Consequently, the documents attached to Mr Tang's affidavit apparently support MCC's contention that the items that were referred to in the 3 December 2009 letter were not included in the December progress claims or any subsequent progress claim. However, that does not necessarily mean that the letter stood outside the 'informal approval process' that the adjudicator found the parties had followed up to that point in time. Two further matters are relevant in my view.

117 First, the 3 December 2009 letter concluded with a request that MCC approve the items so that they could be incorporated in the December progress claim as approved items. The items were not approved and it would be open to infer that they were not included in the December progress claims for that reason. The sequence of events does not necessarily support an inference that a decision was deliberately made to exclude the items referred to in the 3 December 2009 letter from the practice that had been followed by the parties. Rather, it could be inferred that the items were not included in the December progress claim simply because no agreement for their payment had been reached between the parties in accordance with that practice.

118 That leads to the second matter: why were the items referred to in the letter of 3 December 2009 not included in the December progress claims as 'unapproved' items? The adjudicator did not address that question in the Determination for reasons that will become apparent. However, the evidence of Mr Welfare and Mr Dewee was that the parties maintained their practice in respect of agreeing payment for variations and cost plus works until about November or December 2009 when according to Mr Welfare, MCC commenced defaulting in its payment obligations and according to Mr Dewee, MCC ceased approving daily timesheets. At that point, there were a large number of unapproved items, including the items referred to in the 3 December 2009 letter. The adjudicator found that the parties then negotiated over those items until the 17 May Letter was submitted.

119 It would be open to infer from those matters that from about the start of December until when the 17 May Letter was submitted, the parties negotiated over the unapproved items without strictly adhering to the practice that they had previously adopted for dealing with those items. It might be concluded that:

(a) As the adjudicator found, Thiess and MCC negotiated during this period for an agreement over the unapproved items with a view to the items then being submitted as agreed in a progress claim. Again as the adjudicator in effect found, the parties did not abandon the most important feature of their practice prior to the 17 May Letter - agreement on an item prior to a claim for payment being submitted.

(b) However, they did not follow that part of the previous practice by which unapproved items were identified in progress claims submitted during this period, probably because of the breakdown in the process underlying the practice. The unapproved items the subject of the 17 May Letter represented the items that remained to be agreed at the time of the breakdown.

(c) In effect, the negotiations over the unapproved items that were the subject of the 17 May Letter took on a life of their own in circumstances where the items remained unresolved at the commencement of December 2009 and the smooth operation of the informal practice previously adopted by the parties had broken down. There was no point in including the unapproved items as such in progress claims submitted from December 2009 because they did not need to be identified as a reminder to MCC that they remained to be assessed - they were the subject of ongoing negotiation.

120 The effect of a finding in those terms would be that the letter of 3 December 2009 did not contain a payment claim as the parties still intended that a progress claim embodying what they had agreed (and being a payment claim for the purpose of the CC Act) would ultimately be submitted at the conclusion of their negotiations according to the most important aspect of their past practice. The adjudicator did not make findings precisely in the terms I have outlined. However, I consider that the conclusions suggested in the previous paragraph are consistent with the gist of what he found.

121 It is important to appreciate that there was a significant difference between the submissions made to the adjudicator on why the 17 May Letter contained recycled claims and those made by MCC in this application.

122 In the adjudication, MCC submitted that the items referred to in the 17 May Letter had been included in previous progress claims submitted by Thiess (see par 2 of attachment 4 to MCC's submissions to the adjudicator; 'AT-7'). There was a suggestion in MCC's submissions to the adjudicator that prior payment claims had been made in 'other documentation' (see par 5 of attachment 4). However, the 'other documentation' was not identified and in my view, a fair reading of MCC's submissions to the adjudicator is that its primary argument was that the 17 May Letter contained recycled claims because the claims had been included in progress claims previously submitted by Thiess. Plainly, that is how the adjudicator interpreted the submission. It explains his findings at [17] of the Determination.

123 In this application, MCC argued the contrary proposition (the items were not included in any progress claim) and relied on documents other than the progress claims submitted by Thiess to contend that the 17 May Letter contained recycled claims - presumably, the 'other documentation' referred to but not identified in MCC's submission to the adjudicator. The adjudicator did not consider the effect of the 3 December 2009 letter or the other documents relied on by MCC in this application. However, that can be explained by reference to MCC's submissions.

124 As best as I have been able to ascertain, none of the items the subject of the 17 May Letter were included in any progress claim as 'approved items' or 'unapproved items' submitted by Thiess that is among the attachments to Mr Tang's affidavit. Consequently, the adjudicator's findings at [17] of the Determination are not to the point. However, as I have endeavoured to explain, the findings addressed the submission that was made to him by MCC as to why the 17 May Letter recycled payment claims previously made.

Item 1

125 MCC submitted that this item was the subject of a payment claim made in a letter dated 1 December 2009 from Thiess ('AT-11'). The letter contained an explanation by Thiess as to why it considered that it was entitled to be paid for the item concerned. The letter concluded, 'Thiess requests for MCC to approve the outstanding moneys owed and to include the amount in the next progress claim payment'. In its submissions, MCC emphasised the words 'the outstanding moneys owed' and the reference to the amount being included in the next progress claim payment (par 80, MCC's submissions). Consequently, MCC's submission raised issues that have already been referred to in these reasons: the use of expressions such as 'outstanding claims' and the effect of an indication that the item was to be included in a forthcoming progress claim and the subsequent omission of that item in the progress claim.

Items 2, 3 6 - 8, 10, 13 and 18

126 It was contended by MCC that a payment claim was made in respect of items 2, 3, 6 - 8, 10, 13 and 18 by an email from Thiess sent on 26 March 2010 (par 92, MCC's submissions; the email was 'AT-28'). The submission was based on the use of the expression 'outstanding claim' in the email. That contention has already been considered.

Items 4 and 5

127 MCC contended that it approved 'parts' of items 4 and 5 at various times between October 2008 and October 2009 (par 90, MCC's submissions). It was further submitted that consistent with the practice adopted by the parties for approval of variations and cost plus works, items 4 and 5 'as approved items must have been included in past agreed payment claims' (par 91, MCC's submissions). In making that submission, MCC did not identify any document containing the relevant payment claim, including any progress claim submitted by Thiess (and as has already been explained, it also did not do so in its submissions to the adjudicator).

128 Item 4 was for 'procurement' and item 5 for 'procurement for north-south road'. The adjudicator noted at [25] that purchase of the 'bulk' of the items for item 4 had been formally approved by MCC and that the remainder were reasonably required for performance of Thiess' work on site. He then found that MCC was liable to pay the claim for item 4. Implicit in that finding was a further finding that Thiess had not submitted a payment claim for item 4 prior to the 17 May Letter despite MCC's approval.

129 In relation to item 5, the adjudicator found at [26] that MCC had paid the 'bulk' of the expenses incurred in respect of the item but an amount remained outstanding [26].

130 I have had difficulty in relating the description of items 4 and 5 in the Determination and the adjudicator's findings to the detail of the documents referred to by MCC in its submissions ('AT-22' and 'AT-23'). MCC's submissions did not assist in undertaking that task.

131 I do not understand how it can be contended that the adjudicator erred in his findings in respect of items 4 and 5 without MCC identifying a document containing a past payment claim made in respect of those items. The logic of the submission made by MCC does not establish that a past payment claim was made. There may have been a good reason as to why a payment claim was not made in respect of items of expenditure that were approved by MCC or no claim may have been made through oversight. The question is whether a previous payment claim had been made and MCC has not identified any document containing a payment claim made for items 4 and 5 prior to the 17 May Letter.

Item 12

132 MCC submitted that a payment claim was made in respect of item 12 by a letter dated 7 January 2009 from Thiess to MCC (the letter formed part of 'AT-13', page 135 and following of Mr Tang's affidavit). The letter advised MCC that new rates for the period 1 January to 30 June 2009 were attached. The attached rates were hourly and weekly rates to be paid for different categories of labour. As such, the letter did not contain a claim for payment of any particular item of work. Rather, it formed the basis for what Thiess regarded as being the labour rates to be applied when calculating the amount payable for different items of work undertaken during the relevant period.

133 MCC further submitted that it rejected the proposed new rates by letter dated 16 January 2009 (page 141, Mr Tang's affidavit) (par 73, MCC's submissions).

134 As I understand the position, item 12 comprised a claim for additional labour costs incurred in respect of items of work that had previously been the subject of progress claims. The adjudicator found that under the Contract, MCC was liable to pay Thiess at the 'actual rate paid' and that consequently, it was liable to pay at the rates claimed by Thiess for the period 1 January to 30 June 2009 [33]. By inference, payments made in relation to the work undertaken in that period were calculated by reference to lower labour rates.

135 In my view, Thiess' letter of 7 January 2009 was not a payment claim within the meaning of the CC Act. It did not claim payment for any item of work performed by Thiess. It may be possible in considering item 12 to characterise the progress claims for the actual work done during the period 1 January to 30 June 2009 as prior payment claims made at whatever rates were used to calculate the progress claims. However, that is not how MCC framed its argument on this item, either before the adjudicator or in this application and there were no progress claims for the relevant period attached to Mr Tang's affidavit.

Item 16

136 MCC submitted that item 16 had been the subject of a payment claim made in a letter dated 20 September 2009 (page 193, Mr Tang's affidavit; par 75, MCC's submissions). The letter referred to costs incurred in mobilising a drill and blast contractor to the site on a particular day. It enclosed details of the costs claimed by the proposed subcontractor and requested 'early acceptance of our claim' to enable Thiess to pay the subcontractor. The use of the term 'claim' did not suggest that the letter fell outside the practice found by the adjudicator for agreeing such items prior to submission of a payment claim in the form of a progress claim for the reasons already claimed.

Items 20, 21 and 23 - 27

137 MCC submitted that items 20, 21 and 23 - 27 were the subject of a payment claim made in a letter dated 1 December 2009 ('AT-10'; par 77, MCC's submissions). Again, the submission was based on the use of the words 'outstanding payment' in the letter. The effect of Thiess using expressions of that kind in its correspondence has already been considered.

Conclusions on whether the 17 May Letter recycled payment claims

138 A finding in SAT that the correct or preferable decision was that an item claimed in the 17 May Letter was recycled would mean that the adjudicator lacked jurisdiction to determine Thiess' claim for that item. That would result in the total amount determined being adjusted for that item rather than to an order setting aside the Determination entirely. A similar result would most likely follow if, on review by the court, it was found that the adjudicator had erred by failing to find that one or a few of the items claimed in the 17 May Letter were recycled claims. At most, the Determination would be set aside in respect of those items.

139 The majority of the items claimed in the 17 May Letter were said to have been previously claimed in Thiess' letter of 3 December 2009. I do not consider that MCC has demonstrated a sufficiently arguable case that the correct or preferable decision is that the 17 May Letter contained recycled claims for the items referred to in that letter (items 9, 11, 15, 19 and 28 and 're-asserted' items 1, 12, 14, 16, 20, 21 and 23 - 27). The mere fact that the items were not included in the December progress claims or any subsequent progress claims is not enough to establish that the 3 December 2009 letter was a payment claim made independently of the practice that had been adopted by the parties up to that time.

140 As I have indicated, the adjudicator's findings did not address the argument that MCC now raises as to why the 17 May Letter recycled claims previously made in the 3 December 2009 letter. That was not as a result of any procedural error by the adjudicator or any error in his reasoning having regard to the submissions made to him by MCC. However, the analysis of the evidence undertaken earlier in these reasons, together with the findings made by the adjudicator that are not challenged, indicates that the ultimate conclusion that the 17 May Letter did not recycle payment claims is not seriously irrational or unreasonable in any sense relevant to judicial review.

141 I have already indicated my views on whether the remaining claims in the 17 May Letter were recycled payment claims when considering the individual items. Except for item 12, the argument that the remaining items concerned recycled claims rested on the language used in Thiess' correspondence and/or the omission of the item from the December progress claims. The use of the word 'claim' or a similar expression in a communication from Thiess did not mean that the communication contained a payment claim or that it was referring a past payment claim given the parties' practice and the finding that the practice (at least in relation to agreeing items in advance of Thiess making a payment claim) continued until the 17 May Letter was submitted.

142 I do not consider that it is likely that SAT would conclude that the correct or preferable decision in relation to item 12 is that it was a recycled claim and even if it did come to that view, the most likely outcome would be an adjustment to the amount determined. It is even less likely that the court would conclude that it was seriously irrational or unreasonable to find that the claim made in relation to the item in the 17 May Letter was recycled.

143 It follows that I do not consider that MCC has established a sufficiently arguable case that:

(a) The correct or preferable decision was that the 17 May Letter recycled payment claims.

(b) A court might set aside the Determination on the ground that the finding that the 17 May Letter did not recycle previously made claims was unreasonable or substantially irrational. That conclusion rests primarily on a review of the evidence available to the adjudicator and his findings on that evidence. However, it is reinforced by the way in which MCC argued this aspect of its opposition to Thiess' adjudication application in the adjudication.

144 I also consider that an examination of the documents relied on by Thiess to contend that the 17 May Letter contained recycled payment claims does not affect my conclusions about MCC's argument that the 17 May Letter was not a payment claim but merely a further exchange in continuing negotiations.

Was the adjudication application out of time if the 17 May Letter was a payment claim?

145 MCC contended that if the 17 May Letter constituted a payment claim, as the adjudicator found, it was obliged under the Contract to pay that claim within 21 days (that is, on or before 7 June). Payment was not made within that period so that Thiess had 28 days within which to apply for the resulting payment dispute to be adjudicated (that is, by 5 July 2010). However, Thiess' application was not made until 12 July and so it was contended that the adjudicator was bound to have dismissed the application under s 31(2)(a) CC Act as it was made out of time.

146 Thiess contended that its application was made within the 28-day period required by s 26 of the Act having regard to the findings made by the adjudicator about the amendments to GC 37 that were agreed following advice from MCC that it could not provide a bank guarantee as required by the Contract. The adjudicator found that (at [5]):

Part of that new arrangement was that MCC would thereafter make two progress payments to Thiess each month, in the middle and at the end. MCC would make payment 28 days after the claim was submitted, as before. GC 37 was amended to that extent but not otherwise.

147 In its written submissions and at the initial hearing of this application, MCC emphasised the words 'as before' appearing in that passage. It contended that:

(a) Prior to any amendment to GC 37, the superintendent was required to issue a progress certificate within 14 days of the receipt of a progress claim. MCC was obliged to pay Thiess the amount certified by the superintendent within 14 days of the receipt of a progress certificate. However, a progress claim was deemed to be a progress certificate if the superintendent did not issue a certificate within 14 days of receiving the claim. In that event, MCC was obliged to pay Thiess within 21 days after the superintendent received the progress claim.

(b) The reference in the adjudicator's finding to 'as before' in relation to payment within 28 days could only be a reference to that part of GC 37 that provided for payment within that time period; that is, to the circumstance where the superintendent had issued a progress certificate. The adjudicator found that GC 37 was not otherwise amended; that is, that the provision requiring payment within 21 days where no progress certificate was issued remained unaffected by the amended payment arrangement. Consequently, the amended payment arrangement merely permitted Thiess to submit two progress claims each month. GC 37 otherwise applied, unamended, to each progress claim that was submitted.

(c) The superintendent did not issue a progress certificate within 14 days from receipt of the 17 May Letter or at all so that payment was due within 21 not 28 days.

148 Thiess contended that MCC had misapprehended the effect of the adjudicator's finding at [5] of the Determination, particularly when read with [17]. The passage appearing at [5] was to be understood as containing a finding that GC 37 was amended so that payment was to be made within 28 days of receipt of a progress claim in all circumstances, including where the superintendent did not issue a progress certificate.

149 In my view, the adjudicator's findings at [17] do not assist in clarifying what he meant in [5] as to the extent to which GC 37 was amended. However, the adjudicator made a finding at [51] of the Determination concerning the calculation of interest on the amount found to be due that was directly relevant; indeed, it expressed the adjudicator's finding on the very question of when the payment claim comprised in the 17 May Letter fell due for payment and therefore, by implication when the payment dispute occurred for the purpose of s 26 CC Act. The adjudicator stated that 'under the payment terms of the Contract, as amended, the due date for payment of Thiess's claim of 17 May 2010 was 14 June 2010'. Significantly, the finding expressly referred to the Contract as amended by the payment arrangements made following MCC's advice about the bank guarantees. The adjudication application was made within 28 days of when the payment dispute arose on that finding.

150 The parties did not refer me to the finding at [51] of the Determination in their written submissions or in argument at the initial hearing of the application. There were various possibilities for an understanding of the finding made by the adjudicator at [5], when read with the finding at [51]. That was especially as the adjudicator found at [14] that Thiess submitted the 17 May Letter 'with the expectation and understanding, shared by MCC, that it would be assessed as required under the contract and a certificate issued by the Superintendent, in due course'. That finding embodied a further finding that at least some of the provisions of GC 37 relating to processing progress claims were not affected by the amended payment arrangement. The finding is also to be read with the findings at [8] that were to the effect that no certificate was issued by the superintendent (a matter that is confirmed by Mr Yue's evidence).

151 Consequently, I invited further oral submissions on the effect of the finding at [51], when read with [5] of the Determination, on the parties' contentions concerning whether Thiess' adjudication application was out of time if the 17 May Letter was a payment claim for the purpose of the CC Act.

152 Thiess submitted in response to that invitation that:

(a) The finding made at [51] was a finding to the effect that the payment claim contained in the 17 May Letter was payable within 28 days under the terms of the Contract as amended by the payment arrangements. MCC did not contend to the contrary. There was no inconsistency between that finding and the findings made by the adjudicator at [5] and [14] of the Determination. That was so because the adjudicator found in those paragraphs that the amended payment arrangement constituted an agreement to amend GC 37 to provide first, that Thiess was to submit two progress claims each month and second, that those claims were to be paid within 28 days in all circumstances (that is, regardless of whether the superintendant issued a progress certificate). That finding was supported by the evidence.

(b) The amended payment arrangements did not entirely displace GC 37.1 and 37.2. In particular, under GC 37.2 the superintendent could 'check' a progress claim submitted by Thiess and s/he could issue a certificate in relation to retention and other moneys that were assessed to be owed by Thiess to MCC. However, GC 37.2 was amended to the extent that it provided for a 21-day period for payment of a progress claim where no progress certificate had been issued.

(c) The reference to 'as before' in [5] of the Determination was to those parts of GC 37 that were not amended: the ability of the superintendent to check progress claims and to issue certificates certifying amounts due from Thiess to MCC or to be retained by MCC. Paragraph [14] of the Determination was to be understood as a finding that the practice adopted by the parties of agreeing items before they were included in a progress claim did not prevent Thiess from submitting a claim that was to be processed according to the Contract as amended. The adjudicator's concern in making the findings at [14] was to emphasise that the practice of agreeing unapproved items prior to their inclusion for payment in a progress claim did not mean that Thiess could not submit a payment claim under the Contract if that process broke down or no advance agreement could be achieved for whatever reason.

153 MCC submitted that:

(a) The adjudicator drew a distinction between the amendments to GC 37 and the practice that the parties adopted for processing progress claims by agreeing items in advance. Paragraph [4] of the Determination dealt with the Contract prior to amendment, [5] contained the adjudicator's findings on the amendments and [6] indentified the practice adopted by the parties in administering the Contract. Subsequently, the adjudicator sought in [14] to address the consequences of the parties' failing to agree items according to their practice.

(b) The adjudicator had in mind the 'ordinary course' of processing progress claims in describing the Contract and its amendment in [4] and [5]: submission of a progress claim, assessment by the superintendent, issue of a progress certificate and payment on that certificate. The reference to 'as before' in [5] was to be understood in that context - to what was to occur in the ordinary course following amendment of GC 37. Consequently, the only amendment to GC 37 that the adjudicator found had been made was to provide for bi-monthly progress claims. The machinery provisions of the condition otherwise continued to apply unaffected by the amendment. That understanding of the adjudicator's findings is consistent with what was stated at [14].

(c) The findings at [5] and [14] (on MCC's interpretation of those findings) were reasonably open on the evidence having regard to the terms of the correspondence between the parties in which it was agreed to amend GC 37 and Mr Welfare's evidence. It was consistent with Mr Yue's evidence as to his expectation in April/May 2010 that he would, as superintendent, assess a claim made in relation to the unapproved items that were the subject of the 17 May Letter once sufficient information regarding those items had been provided by Thiess.

(d) The adjudicator did not identify the basis on which he held in [51] that the amount claimed in the 17 May Letter was payable 28 days after the letter was submitted. However, it could not have been on the ground that GC 37 had been amended so that a progress claim would be payable within 28 days in all circumstances. That was demonstrated by the fact that the adjudicator had independently assessed each item claimed, whereas he would have regarded the 17 May Letter as conclusive if he had found that the failure to issue a progress certificate after 28 days was the basis for his finding.

(e) The finding at [51] was symptomatic of error. It appeared that the adjudicator had overlooked the provisions of GC 37.2 that applied where no progress certificate was issued in making his findings or he had failed to address the effect of those provisions (including when deciding whether he had jurisdiction). There had been a failure to consider a relevant matter of a kind that demonstrated jurisdictional error.

154 There were aspects of each party's submissions that resonated with the gist of the adjudicator's reasoning. However, I think that ultimately they reflected rather than resolved the ambiguity that I perceive in the finding at [5] and which was demonstrated by the parties' initial submissions on the meaning to be attributed to the finding. In particular, it is not clear whether the adjudicator overlooked the provisions of GC 37.2 relating to the consequences of the superintendent failing to issue a progress certificate as MCC argued (those provisions having not been excised from the condition following its amendment) or whether he actually made a finding that GC 37 had been amended in the way contended for by Thiess or in some other way so that there was no provision in the condition that deemed a progress claim a progress certificate payable within 21 days.

155 I do not think that either possibility can be ruled out. Accordingly, it cannot be said that there is necessarily an internal inconsistency in the Determination (between the findings at [5] and [51] that, of itself, demonstrates that the adjudicator's ultimate finding that Thiess complied with s 26 CC Act was arbitrary or capricious or unreasonable in the Wednesbury sense or should otherwise be set aside according to what was said by Gummow A-CJ and Keifel J in SZMDS . Infelicity in the choice of words to express a finding is obviously very different from an internal inconsistency between findings.

156 In Buck v Bavone ((1976) 135 CLR 110, Gibbs J listed the kinds of error that might vitiate a decision maker's opinion that a state of affairs existed to confer jurisdiction. He included a failure by the decision maker to consider matters that it was required to consider (118 - 119). However, a failure of that kind is directed to the requirements imposed by the empowering legislation - a failure to take into account a matter that the legislation expressly or by necessary implication required the decision-maker to consider in forming its opinion. A possible failure by the adjudicator in this matter to have adverted to all of the provisions of GC 37.2 in the course of reasoning towards his ultimate finding under s 31(2)(a) CC Act is of a different character.

157 In the light of the ambiguity in the finding at [5], when read with [51], it is necessary to consider the evidence to ascertain whether the adjudicator's decision not to dismiss the adjudication application on finding that the 17 May Letter was a payment claim was 'unreasonable' as contended by MCC or otherwise, arbitrary, capricious or irrational or without any basis in the evidence or against the great weight of the evidence (reading the comments by Gummow A-CJ and Keife J in SZMDS at their widest). It is that decision that must ultimately be tested against those forms of error. Consequently, in this part of the reasons I am not directly concerned with resolving the apparent ambiguity in the adjudicator's finding at [5] except to the extent that resolution of the ambiguity might assist in determining whether the decision not to dismiss the adjudication application is susceptible to being set aside in a review in SAT or in the exercise of the court's supervisory jurisdiction. However, it will become apparent that I do not think that it is likely that the adjudicator's findings at [5] of the Determination bear the meaning contended for by MCC when the evidence and the parties' submissions in the adjudication are considered.

158 The adjudicator did not describe the evidence on which he relied to find that the payment arrangements were amended. There were two possible sources of evidence:

(a) letters exchanged between MCC and Thiess on 15 and 19 May 2009 ('AT-35' and 'AT-36'); and

(b) evidence given by Mr Welfare in his statutory declaration.

159 On 15 May 2009, MCC wrote to Thiess stating that:

Mr Simon [a reference to the construction manager for Thiess] request MCCM pay twice-monthly progress payments, that is, MCCM first pay the confirmed figure in middle of month and second pay the confirmed figure in the end of month. The first and second payment is within 28 days. (emphasis added)

160 On 19 May 2009, Thiess wrote to MCC referring to the letter of 15 May 2009 and stating that:

Thiess accepts that MCCM shall provide bank guarantees for a total of $8.8 m and shall pay twice monthly progress payments with each payment due within 28 days of submission.

161 The evidence given by Mr Welfare in his statutory declaration consisted of statements expressed as conclusions conveying his understanding of what had been agreed between the parties. At par 11 he described the content of a letter dated 15 May 2009 from MCC to Thiess ('AT-35'); at par 12 he stated the 'intention' of the arrangements proposed by MCC and agreed by Thiess and at par 14 he described the 'details' of the process adopted for payment under the amended arrangement. However, it must be borne in mind that MCC did not contest Mr Welfare's evidence when considering the effect of the evidence and the adjudicator's findings.

162 In summary, Mr Welfare stated that:

(a) The parties entered into discussions in May 2009 to determine an alternative arrangement to that provided in GC 44.3 of the Contract as MCC was unable to provide the bank guarantees required by that clause (par 9 of Mr Welfare's statutory declaration).

(b) As a result of those discussions, MCC wrote to Thiess by letter dated 15 May 2009 'confirming' arrangements as to the total amount of bank guarantees to be provided and the 'timing and payment of progress claims' - Mr Welfare's evidence as to what MCC confirmed is in identical terms to what was stated in Thiess' letter of 19 May 2009 and which has already been reproduced in these reasons (par 11).

(c) The alternative arrangements were intended to amend the payment regime set out in GC 37 of the contract, 'effectively replacing the timing provisions for payment claims set out in clause 37.1 and 37.2' (par 12).

(d) The parties adopted a process for payment under the alternative arrangement. He described that process in detail at par 14 of his declaration. That process was clearly the practice found by the adjudicator to have been adopted by the parties for dealing with variations and cost plus items. At par 14(i) of his declaration, Mr Welfare stated that MCC was required under the amended payment arrangement to pay Thiess within 28 days of a progress claim being submitted. Mr Welfare did not qualify that statement in any way, suggesting that payment was required within 28 days in all circumstances on his understanding of the arrangements.

163 Consequently, Mr Welfare did not suggest that the agreed arrangement for payment of progress claims retained the provisions for deeming a progress claim to be a progress certificate payable within 21 days or that payment of a progress claim was to be made within that period in any circumstance.

164 Mr Welfare's evidence on the detail of the practice made no reference to the issue of progress certificates or indeed, to the superintendent. However, as previously noted, there was other evidence that suggested that the superintendent continued to review unapproved items and was the person through whom Thiess sought MCC's agreement (for example, Thiess' letter of 3 December 2009). Mr Welfare's description of the practice did not suggest that it formed part of the amended payment arrangement under the Contract or otherwise constituted a variation to the terms of the Contract. Rather, the practice was a means by which the payment arrangement was implemented.

165 Neither party suggested in their further submissions on the adjudicator's findings at [5] and [51] that there was other material provided to the adjudicator (and therefore, to the court) that was relevant to ascertaining what the parties had agreed in amending the Contract (MCC made reference to the statutory declaration of Mr Yue at one point in its submissions but not to suggest that it was relevant to ascertaining the parties' agreement).

166 The parties' submissions to the adjudicator are also relevant. Thiess submitted in its adjudication application (par 3.6, 'AT-5') that the Contract had been amended in two respects:

(a) the Respondent would provide a total of $8.8 million in bank guarantee …

(b) the Respondent would make twice monthly progress payments to the Applicant; in the middle of each month and at the end of each month. Payment was due within 28 days of the date the relevant payment claim was submitted.

167 That submission and the following paragraphs in the adjudication application that described the practice for processing progress claims mirrored the evidence given by Mr Welfare. Further, Thiess submitted at pars 6.2 - 6.5 of its adjudication application that payment of the claim made by the 17 May Letter was required within 28 days of the date on which it was submitted.

168 MCC did not contend in the adjudication that if the 17 May Letter was a payment claim, it had been obliged under the Contract to pay the claim within 21 days so that the adjudication application was out of time. Rather, it argued that the 17 May Letter was not a payment claim or if it was, Thiess' application was made outside the time permitted by s 26 CC Act because it contained recycled claims (see par 6 of MCC's submission to the adjudicator and attachments 3 and 4 to the submission; 'AT-7'). MCC dealt with the amendments to the payment arrangements under the Contract in attachment 7 to its submission, arguing that the practice of agreeing an item prior to Thiess claiming payment for the item in a progress claim formed part of those arrangements and therefore, the Contract as amended. I agree with Thiess that it was this submission that the adjudicator sought to address at [14] of the Determination.

169 Apart from contending that the practice for processing progress claims adopted by the parties formed part of the Contract, MCC did not dispute Thiess' statement in its adjudication application as to the effect of the amendments to the Contract agreed in the correspondence exchanged in May 2009. That correspondence did not refer to the procedure for processing progress claims and so any argument that the practice adopted by the parties formed part of the Contract must have been based on other matters. Consequently, I consider that MCC accepted before the adjudicator that the effect of the amendments to the Contract agreed in May 2010 was as stated by Thiess in its adjudication application. MCC did not, therefore, contest that under the Contract as amended progress claims were to be paid within 28 days in all circumstances. No party raised in the adjudication the possibility that the provisions of GC 37 that deemed a progress claim a progress certificate payable within 21 days remained part of the Contract following the amendments agreed in May 2009.

170 A comparison between Thiess' statement of the amended payment arrangement at par 3.6 of its adjudication application (reproduced above) and the relevant passage at [5] of the Determination indicates that it was most likely that the adjudicator adopted Thiess' statement in making his findings, except, of course, the statement did not contain the words 'as before'.

171 In my view:

(a) Contrary to Thiess' contention, the words 'as before' in [5] of the Determination cannot be read as a reference to that part of GC 37 that permitted the superintendent to issue a certificate assessing the amount of money to be retained by MCC and any amount owing by Thiess. The words plainly refer back to the time for payment of a progress claim submitted by Thiess.

(b) There is also nothing in the evidence to suggest that the role of the superintendent following amendment of the Contract was limited to 'checking' progress claims. Rather, the reference in MCC's letter of 15 May 2009 to the 'confirmed figure' was most likely to an amount confirmed by the superintendent. It is not clear whether confirmation was envisaged to be by the issue of a progress certificate as provided for by GC 37.2 prior to amendment or by some other less formal procedure of the kind that was adopted by the parties. The adjudicator, of course, found that the amendment did not do away with the procedure for issuing a progress certificate.

(c) Contrary to MCC's submission, the fact that the letter of 15 May 2009 referred only to 'confirmed' amounts did not mean that the amendments to GC 37 that were agreed by the parties preserved those provisions in the condition that deemed a progress claim to be a progress certificate where no certificate was issued within 14 days and further, required payment on the deemed certificate within 21 days of the progress claim being submitted. Rather, the letter might be understood as a proposal by which:

(i) Those provisions of the Contract were deleted so that MCC would only be liable to pay progress claims that had been confirmed by it rather than to pay claims that were deemed to be payable merely through the effluxion of time and without confirmation by MCC.

(ii) MCC agreed to undertake whatever steps were considered necessary to confirm the claim within 28 days of a progress claim being submitted. That increased the time available to assess and 'confirm' a claim from 14 to 28 days.

(iii) MCC agreed to make payment of the confirmed amount within 28 days from the progress claim being submitted. The possibility that it would be required to pay a progress claim within 21 days was removed.

(d) That is a commercially sensible reading of MCC's letter of 15 May 2009 as it confers benefits on MCC as part of the trade-off for moving to bi-monthly progress claims.

(e) That reading of the letter of 15 May 2009 is also consistent with Thiess' response of 19 May 2009, with its emphasis on payment of progress claims within 28 days without any qualification being added (the deeming provisions and 21 days payment on a deemed progress certificate being aspects of GC 37 that were obviously favourable to it).

(f) There is a difficulty with MCC's argument that the reference to a 'confirmed figure' in the letter of 15 May 2009 indicated that the 28-day period for payment would only apply where the superintendant issued certificates as required by GC 37.2, with the result that the only amendment to CG 37 that was agreed was to provide for twice monthly progress claims. It would not have been necessary to refer to a payment period at all to give effect to what was proposed by MCC on that understanding of the correspondence. All that would have been required was an amendment to item 28 of Annexure Part A (which specified when progress claims were to be made) as referred to in GC 37.1 (which obliged Thiess to claim payment progressively in accordance with item 28). That suggests that the parties were agreeing in their correspondence to more than providing for two progress claims per month; that is, to more than merely amending, in effect, item 28.

(g) It is possible that MCC only referred to a 'confirmed figure' in its letter of 15 May 2009 and the parties did not mention in their correspondence the deeming provisions in GC 37, and the consequent 21-day period for payment where a progress certificate was not issued, because they did not intend to amend those provisions. It is also possible that they simply overlooked those provisions when corresponding over the amendment. However, according to MCC's letter of 15 May 2009, its proposal to amend the Contract followed 'in depth' discussions in which the arrangements for payment of progress claims was obviously considered in the context of MCC's ability to provide a bank guarantee. Neither party adduced direct evidence concerning those discussions in the adjudication. However, it might be thought odd to interpret the correspondence as reflecting either of the possibilities referred to earlier given that there had been prior in depth discussion about the arrangements for the payment of progress claims. In that context, it is at least reasonable to infer that the correspondence recorded what was agreed as to the timing, confirmation and payment of progress claims in every instance (those being the most important commercial matters dealt with by GC 37). Indeed, that appears to me to be the likely inference to be drawn from the correspondence having regard to the other matters to which I have referred. The correspondence contained the parties' entire agreement on the timing and payment of progress claims and replaced the provisions of GC 37 that had dealt with those two matters. The interpretation that MCC now seeks to place on its letter of 15 May 2009 is strained. It is not an interpretation that occurred to MCC in the adjudication.

(h) That view of the correspondence accords with Mr Welfare's evidence. He did not suggest that all of the provisions in GC 37.1 and 37.2 were replaced by the amendments agreed in May 2009. Rather, he characterised the amendments as 'effectively replacing' the 'timing provisions' payment of progress claims. The deeming provisions of GC 37 on which MCC rely concern the timing of payment of progress claims.

172 I consider that having regard to all of those matters, it is cannot be concluded that MCC has demonstrated a sufficiently arguable case to justify refusing to grant leave under s 46 CC Act that the adjudicator erred in finding that if the 17 May Letter was a payment claim, payment of the claim was due within 28 days so that the adjudication application was made within the time prescribed by s 26. That was a finding that was open on the evidence; indeed, in my view, it is the finding that best reflected the evidence. It was a finding that accorded with the way in which both parties dealt with the effect of the amendments to the Contract agreed in the correspondence of 15 and 19 May 2009 in the adjudication. I do not consider that it is likely that the finding would be held to be unreasonable or arbitrary or capricious when regard is had to the evidence and the parties' submissions to the adjudicator.

173 I also do not consider that it is likely that the finding would be characterised in that way when the Determination is read in the context of the evidence and the parties' submissions to the adjudicator. MCC did not contend that any claim contained in the 17 May Letter was payable within 21 days under the Contract as amended (either in support of an argument that adjudication application was made out of time or for any other reason). Rather, it contended that the letter contained recycled claims or was part of continuing negotiations. The adjudicator was entitled to assume that it was not issue that the time for payment for any progress claim (payment claim) under the Contract as amended, including any claim made by the 17 May Letter, was 28 days having regard to the parties' submissions and the fact that the evidence of Mr Welfare and Mr Dewee on the amended payment arrangements was not contested. The findings at [5] of the Determination should be read in that context. Read in that way, it is reasonably open to conclude as follows (indeed, in my view, this represents the preferable conclusion):

(a) The words 'as before' and the finding that GC 37 was amended 'only to that extent' could not have been intended to convey a finding that the provisions of GC 37 relating to deeming progress claims progress certificates payable in 21 days were retained following the amendments to the condition that were agreed in the May 2009 correspondence. That was not an issue that was raised in the adjudication on the parties' submissions or by the evidence.

(b) The words 'as before' merely indicated that payment was to be within 28 days as had been provided for in the 'ordinary course' in the Contract prior to amendment. That reflected the focus of the parties' submissions and evidence in the adjudication - that is, that it was common ground that progress claims were to be paid within 28 days under the Contract as amended.

(c) The reference to GC 37 only being amended to that extent was directed to the submission made by MCC in the adjudication that the parties' practice of agreeing an item in advance of the item being submitted for payment in a progress claim formed part of the Contract as amended. It was not intended to express a finding about a matter that was not agitated in the adjudication.

(d) The finding at [14] was also directed to that submission.

174 Finally, I consider that the prospects of MCC persuading SAT on any review of the decision by the adjudicator under s 31(2)(a) on the ground that the Contract as amended provided for payment of the claim made in the 17 May Letter within 21 days are not sufficiently strong to justify refusing Thiess' application for leave to enter judgment for the reasons that I have given as to why it is unlikely that the decision would be held to be unreasonable or irrational or arbitrary.