[2012] WADC 27

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL

LOCATION : PERTH

CITATION : STATE SIDE ELECTRICAL SERVICES PTY LTD - v- WA COMMERCIAL CONSTRUCTIONS PTY LTD [2012] WADC 27

CORAM : DEPUTY REGISTRAR HEWITT

HEARD : 16 FEBRUARY 2012

DELIVERED : 1 MARCH 2012

FILE NO/S : CIVO 2485 of 2011

BETWEEN : STATE SIDE ELECTRICAL SERVICES PTY LTD

Applicant

AND

WA COMMERCIAL CONSTRUCTIONS PTY LTD

Respondent

Catchwords:

Practice and procedure - Application to enforce adjudication under Construction

Contracts Act 2004 - Consideration of applicable principles

Legislation:

Construction Contracts Act 2004

Civil Judgments Enforcement Act 2004

Result:

Application adjourned pending resolution of Supreme Court proceedings

Representation:

Counsel:

Applicant : Mr D Ryan

Respondent : Mr S Ellis

Solicitors:

Applicant : Talbot Olivier

Respondent : Tottle Partners

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

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

Devaugh Pty Ltd v Lamac Developments Pty Ltd [2000] WASC 314

Diploma Constructions Pty Ltd v Windslow Corp Ltd [2005] WASC 74

Doric Building Pty Ltd v Marine & Civil Constructions Co Pty Ltd [2005] WASC 155

Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80

1 DEPUTY REGISTRAR HEWITT : On 14 November 2011 an adjudication proceeding between the applicant and the defendant to this action was determined in favour of the applicant which then proceeded to lodge a copy of the adjudication with this court and commence the process of execution. In doing so, the plaintiff overlooked the requirement under s 43 of the Construction Contracts Act 2004 to obtain the leave of the court as a precursor to the process of execution. That leave was never sought nor granted and as a consequence a means enquiry which was issued under the provisions of the Civil Judgment Enforcement Act 2004 was set aside. Subsequently the applicant brought the application which is before me seeking leave to have the determination enforced as a judgment. That application is opposed.

2 There is no doubt that an issue between the parties was referred to an adjudication, that adjudication took place and as a consequence of it an order was made by the adjudicator that a sum of $128,091.73 be paid by the respondent to the applicant.

3 I take the view that prima facie, as the possessor of an adjudication in its favour, the applicant is entitled to enforce the benefits of that adjudication and the onus lies on the respondent to persuade me that it would not be appropriate to grant the leave sought by the application. That principle was enunciated, in relation to an attempt to enforce an award under the Commercial Arbitration Act of New South Wales by his Honour Mr Justice Rolf in Cockatoo Dockyard Pty Ltd v Commonwealth of Australia (No 3) (1994) 35 NSWLR 689 where his Honour said at pages 695 and following:

In my opinion, s 33 is not a dispute resolving provision referring a matter the subject of arbitral proceedings to the court. It provides a summary procedure whereby awards may be enforced 'in the same manner as a judgment or order of the court to the same effect' and allows judgment to be entered in terms of the award. In the context of the Act that cannot, in my opinion, mean the court is given power under s 33 to reconsider whether the award should have been made and, if for some reason it concludes that it should not, to refuse to enforce the award.

Prima facie, and so much was conceded by Mr Bennett, a party with the benefit of an award can seek to enforce it by resort to s 33. It is necessary for a party resisting an order under 33 to establish a reason why the award should not be enforced. A reason may be that the court considers the award is arguably vitiated by appealable error, or by other circumstances making it susceptible of being set aside in accordance with the provision of the Act. In other words it may well be an appropriate exercise of the court's discretion not to grant leave if an application for leave to appeal is on foot or if an application has been made to set aside award, for example, on the ground of misconduct. However unless an attempt is being made to have the award set aside I have difficulty envisaging other circumstances in which the discretion can be exercised. Certainly I do not regard s 33 as a 'back door' method of appealing against an award insofar as it constitutes a decision by the arbitrator how he should exercise his discretion. The discretion given does not include, in my opinion, an ability to re-visit the way in which the arbitrator exercise his discretion where, otherwise, his discretion is not subject to attack in accordance with the Act. A contrary conclusion would, I believe, be totally at odds with the obvious intention and philosophy of the Act.

4 That proposition has received approval in a number of Western Australian cases including Doric Building Pty Ltd v Marine & Civil Constructions Co Pty Ltd [2005] WASC 155, Devaugh Pty Ltd v Lamac Developments Pty Ltd [2000] WASC 314 and Diploma Constructions Pty Ltd v Windslow Corp Ltd [2005] WASC 74. Although those cases concern the enforcement of an award under a commercial arbitration the same principles apply to the enforcement of an adjudication under the present act and in that regard I rely on the observations of Mr Justice Corboy and Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 [25] and following.

5 This application therefore requires me to form a view as to whether the issues which are raised by the writ of certiorari which has been filed by the respondent raises points of sufficient strength to justify a refusal of leave to issue execution on the adjudication which has been filed in this court. In that process the respondent has identified a number of issues which it contends should persuade me that the relief it seeks has a high prospect of success and there is a considerable prospect that the adjudication would be set aside.

6 The first ground which is raised is that the process of adjudication was not properly entered into because the invoices which were the subject of the adjudication did not comply with the requirements of Construction Contracts Act because each was not signed, did not specify the date of the claim and did not contain sufficient information to allow the respondent to assess them. Of these various complaints the most glaring is the fact that the invoices, which are exhibited to the affidavit in opposition of Mr A Tatulli contain almost no information as to the works for which claim has been made. By way of example I refer to that which is exhibited at page 31 of the affidavit which describes the works as building works completed at Shelley Primary School, a total claim including GST for that work is $100,856. It strikes me that such an invoice is so devoid of useful information that it might well be characterised as insufficient for the purposes of the Act and therefore not a proper basis for adjudication. The other complaints made in respect of the invoices are clear from their face.

7 The next complaint which is made is that the application was not prepared in accordance with s 26(2)(b) of the Construction Contracts Act . That section requires any application for adjudication to have attached to it or set out details of the construction contract involved or relevant extracts of it.

8 In the present context that requires an examination of the manner in which the contract between these parties came into existence. The materials before me establish that the applicant was asked to give a quote for certain works. Upon receiving the quote, the respondent provided the applicant with a subcontract purchase order. The purchase order referred to terms upon which the order was issued and those terms were attached as a second page to the order. In my view the purchase order containing as it did terms beyond those in the original quote, was a counter offer which was accepted by the performance by the applicant of the relevant work. Those materials were not provided to the adjudicator. In my view those materials were clearly relevant and in particular I refer to cl 3 of the terms and conditions, a copy of which is exhibited at page 16 of the affidavit of Angela Tatulli to which I have previously referred. Clause 3 is in the following terms 'Payment terms 30 days after the month end in which the invoice is received at KMC's office or in line with the payment terms of the principal contract'.

9 Nothing is put before me as to the payment terms of the principal contract but it seems to me that it is absolutely critical for the adjudicator to be able to form an opinion as to when the monies claimed by the applicant were due and payable.

10 In the present circumstances the failure to provide the contractual documentation was more than a technical oversight. It went to the heart of the adjudication because there could be no payment dispute upon which the adjudicator was entitled to adjudicate unless there had been default. The information which is provided by the respondent includes a copy of the application for adjudication form. That form is dated 23 September 2011. Within the body of that application is information to indicate that the relevant invoices were first sent to the respondent on 28 August 2011. When one looks at the terms and conditions on the purchase order, which I find to be a part of the contractual arrangements between the parties, it is clear that the submission to adjudication was made less than 30 days after the month end in which the invoice was received at the respondent's office.

11 I am told that this point has not been raised in the writ of certiorari which has been filed but nonetheless I think it a point which could be allowed as an amendment, and on the materials before me would establish that the adjudication had miscarried seriously because there was no payment dispute upon which an adjudication could be made.

12 In addition to the matters which I have already mentioned, challenge is made to the adjudication on the basis that one of the amounts claimed was out of time, which appears to likely to be the case and finally that the application was not in proper form because it bundled up claims for a number of invoices over a number of jobs in a manner which is not contemplated or permitted by the Act save with the consent of the respondent which was not forthcoming. For these reasons in my opinion there are valid concerns as to the validity of the adjudication which the applicant seeks to enforce and for that reason I am not prepared to grant the leave which is sought in the originating summons.

13 In those circumstances I think the proper outcome is to adjourn this application sine die with leave to relist it upon the determination of the respondent's writ of certiorari currently proceeding before the Supreme Court of Western Australia. I would also consider it premature to order costs against either party until that decision has been handed down.