[2012] WADC 66

 

 

 

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL

 

 

LOCATION : PERTH

 

 

CITATION : MICHAEL EBBOTT t/as SOUTH COAST SCAFFOLDING AND RIGGING SERVICES -v- HIRE ACCESS PTY LTD [2012] WADC 66

 

 

CORAM : COMMISSIONER GETHING

 

 

HEARD : 26 APRIL 2012

 

 

DELIVERED : 10 MAY 2012

 

 

FILE NO/S : CIVO 30 of 2012

 

 

BETWEEN : MICHAEL EBBOTT t/as SOUTH COAST SCAFFOLDING AND RIGGING SERVICES Applicant

 

 

AND

 

 

HIRE ACCESS PTY LTD Respondent

 

 

 

 

 

 

 

Catchwords:

 

Building and construction - Payment dispute - Determination by adjudicator under the Construction Contracts Act 2004 (WA) - Application for leave to enforce as a judgment of the District Court - Parallel judicial review proceedings

 

 

Legislation:

 

Construction Contracts Act 2004

 

Result:

 

Application for leave to enforce the determination granted

 

 

 

Representation:

 

Counsel:

 

Applicant : Ms A Dowley

Respondent : Mr D Howlett

 

Solicitors:

 

Applicant : Contract Intelligence Pty Ltd

Respondent : Tan & Tan

 

 

 

 

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

 

 


COMMISSIONER GETHING :

 

Overview

 

1 By Notice of Originating Motion dated 22 February 2012, the applicant sought leave to enforce a determination of an adjudicator under the Construction Contracts Act 2004 (CCA) (WA) s 43. The determination to which the application relates was made on 23 January 2012 (Determination). A copy of the Determination certified by the Building Commissioner is before the court.

 

2 The respondent opposes the grant of leave on the basis that there is an outstanding appeal to the Supreme Court from a related decision of the State Administration Tribunal (SAT).

 

3 The respondent submits that this appeal makes the case analogous to one in which the Determination is challenged by judicial review. The key issue is whether the existence of the Supreme Court appeal and/or the error to which the appeal relates, means that the District Court should decline to enforce the Determination.

 

4 At the commencement of the hearing, I inquired of counsel for the respondent whether the hearing was for a stay of the CCA s 43 application or for a determination of the CCA s 43 application, with the implications of the related Supreme Court appeal being included in the discretionary framework. Counsel advised me that the hearing was the determination of the CCA s 43 application.

 

5 At the conclusion of the hearing, I provided counsel with the opportunity to file and serve written submissions. This was in part due to the fact that I was scheduled to hand down the decision in State Side Electrical Services Pty Ltd v WA Commercial Constructions Pty Ltd [No 2] [2012] WADC 60 on 27 April 2011. This decision dealt with similar issues, and I wanted the benefit of submissions from the parties on how that decision impacted on the present application.

 

Background

 

6 In the course of 2010 the parties executed two identical agreements by which the applicant was to erect scaffolding provided by the respondent at the Perth Arena building site (Agreements). On 14 April 2011, the respondent issued invoices totalling $120,238.27 for work done between 14 March 2011 and 8 April 2011. The respondent refused to pay the invoices. The applicant subsequently initiated the adjudication process under the CCA.

 

7 The Agreements both contained a clause dealing with the time for payment in the following terms:

 

The sub-contractor shall invoice for Services 30 working days prior to the due date for payment. The payment date being [the thirtieth day] of each month. Any Invoices which are not received by the due [date] will not be processed until the following pay period. Payment of invoices shall be paid either by cheque of bank transfer to the account listed on appendix A…

 

8 In her initial decision delivered on 18 July 2011, the adjudicator dismissed the applicant's claims on the basis that the application under the CCA was made out of time. The applicant was of the view that the invoices were due for payment on 30 May 2011. The adjudicator implied the terms in CCA sch 1 div 5 cl 7 and decided that the due date for payment was 12 May 2011. It followed that the last date for service of the adjudication application was 9 June 2011. As the adjudication application was lodged on 20 June 2011 it was out of time.

 

9 A decision by an adjudicator to dismiss an adjudication application pursuant to CCA s 31(2)(a) may be the subject of an appeal to the SAT: CCA s 46(1). The applicant appealed to the SAT. The Tribunal member's decision is reported as South Coast Scaffolding & Rigging v Hire Access Pty Ltd [2012] WASAT 5. The Tribunal allowed the application for review and remitted the adjudication to the adjudicator to be decided in accordance with the Tribunal's decision. The sitting member followed the decision in Re Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes Pty Ltd [2009] WASAT 133 [50] and held that it is only if CCA s 18 applies that there must be payment within 28 days of the claim within CCA cl 7(3). As the Agreements provided for a date for payment, CCA s 18 did not apply and the term of the Agreement specifying that the payment be made by the thirtieth day of each month remained operative.

 

10 The adjudicator's subsequent decision is dated 23 January 2012, being the Determination the subject of the present application. In the Determination, the adjudicator held that the respondent is liable to the applicant in the sum of $120,238.27, with interest, to be paid by 7 February 2012.

 

11 The respondent has not commenced judicial review proceedings in relation to the Determination.

 

12 The respondent did, however, appeal from the decision of SAT to the Supreme Court. This appeal was lodged on 7 February 2012. At the same time as the appeal was lodged, the respondent sought a stay of the decision of SAT pending the determination of the appeal. This stay was refused by Hall J: Hire Access Pty Ltd v Ebbott t/as South Coast Scaffolding & Rigging [2012] WASC 108. The first order sought was that the SAT decision and its orders of 10 January 2012 be stayed pending the appeal. His Honour held that as the orders of SAT had been completely implemented, there was nothing to stay ([13] - [19]).

 

13 In the same application, the respondent also sought a stay of the Determination, along with an order that the respondent is not liable to make payments as determined by the adjudicator pending the appeal. Hall J held that there was no power to make this order ([19]). Hall J observed [15] - [18]:

 

The first determination was set aside by the SAT and the matter was remitted. The effect of this was that the adjudicator had to determine the matter afresh, albeit with the guidance of the SAT's decision. The second determination did not, however, derive its validity from the SAT orders. It was a determination made pursuant to the Construction Contracts Act and derives its lawful character from that Act.

 

This position is reinforced by the fact that the Construction Contracts Act requires a successful party to an adjudication to apply to a competent court for entry of judgment and for leave to enforce the determination: see s 43. In these circumstances, the appellant would have an opportunity to seek a delay or deferral of enforcement from the court to which such an application is made. I make no comment on whether such an application would have merit in the circumstances of this case, but the availability of that avenue counts against any argument that it is necessary to construe the power to stay provided for in O 65 more broadly than the words of the Rules indicate.

 

In the present case, the respondent has commenced proceedings in the District Court to enter judgment and for leave to enforce the adjudicator's determination. I am told that that application has been adjourned sine die pending this application.

 

In my view the District Court has ample power to decline leave to enforce the judgment if such a course is merited, or to grant a suspension order under the Civil Judgments Enforcement Act 2004 (WA). With those proceedings afoot, it would not be appropriate for me to make further comment in that regard.

 

14 His Honour went on the find that, in the event that there was power to grant the stay, he would decline to do so in the exercise of discretion. This was because his Honour was not satisfied that there were special circumstances that would justify departure from the ordinary rule that the successful party at first instance is entitled to enforce the judgment pending the determination of the appeal ([23] - [30]).

 

Power to enforce a determination

 

15 The power granted to the District Court to grant leave to enforce a determination in CCA s 43 is in the following terms:

 

43. Determinations may be enforced as judgments

 

(1) In this section -

 

court of competent jurisdiction , in relation to a determination, means a court with jurisdiction to deal with a claim for the recovery of a debt of the same amount as the amount that is payable under the determination.

 

(2) 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, and if such leave is given, judgment may be entered in terms of the determination.

 

(3) For the purposes of subsection (2), a determination signed by an adjudicator and certified by the Building Commissioner as having been made by a registered adjudicator under this Part is to be taken as having been made under this Part.

 

16 The features of the statutory scheme in which CCA s 43 is placed were summarised by Beech J in O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2008] WASC 58; (2008) 36 WAR 479; [39] - [41] as follows:

 

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'.

 

The plaintiff submitted, and the defendants accepted, that the scheme of the Construction Contracts Act was such that on an application under s43(2) for leave to enforce a determination, it was for a defendant to point to circumstances which justified a refusal to grant leave. Absent such circumstances, leave will be granted. I accept that submission. In my opinion, the statutory scheme gives rise to a predisposition in favour of a grant of leave. A determination is binding (s 38) and gives rise to a liability to pay (s 39).

 

17 The issue of judicial review of an adjudicator's decision under the CCA has been the subject of recent consideration by the Court of Appeal in Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217 and by other justices of the Supreme Court in Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80, Re Anstee-Brook; Ex Parte Mount Gibson Mining Ltd [2011] WASC 172 and O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 ( O'Donnell(2)) . In Witham v Raminea Pty Ltd [2012] WADC 1, I reviewed these authorities, and summarised their effect in the following terms [50]:

 

(a) an adjudicator's decision under the CCA is amendable to judicial review for an error of law going to jurisdiction;

 

(b) the test for jurisdictional error by an adjudicator under the CCA is that applicable to an inferior court;

 

(c) an adjudicator's decision under the CCA is not amendable to judicial review for a non-jurisdictional error or law;

 

(d) a denial of procedural fairness is a non-jurisdictional error of law, at least for the purposes of decisions of adjudication under the CCA; and

 

(e) the court should take into account whether the adjudicator's decision would be open to successful judicial review in exercising the discretion in CCA s 43.

 

18 In relation to the last point, a 'determination' which is attended by an error of law going to jurisdiction is not a 'determination' for the purposes of CCA s 43, and thus may not be enforced.

 

19 There is also authority that the requirements of CCA s 31(2) are essential preconditions to the exercise of power by an adjudicator, and that an error in relation to one of them will amount to an error of law going to jurisdiction: Perrinepod [1], [16], [97]; Thiess [72], O'Donnell (2) [120]. Relevantly for present purposes, CCA s 31(2)(a)(ii) provides that the adjudicator is to 'dismiss an application without making a determination of its merits if … the application was not prepared and served in accordance with section 26'. CCA s 26 provides that the application must be prepared, served on each party to the contract and served on the adjudicator (if appointed, or an appointor) 'within 28 days after the dispute arises'.

 

20 In State Side the respondent, in effect, applied for a stay of an application to enforce a determination pursuant to CCA s 43. The stay was sought on the basis that a Supreme Court justice had granted an order nisi in judicial review proceedings instituted by the respondent seeking to quash the determination sought to be enforced in the District Court proceedings. I granted the stay, referring to the decision in Anstee-Brook as an example of the Supreme Court closely scrutinising an application for an order nisi in relation to the review of a decision of an adjudicator under the CCA. I held that, in the circumstances of that case, the fact that a Supreme Court justice had reviewed the application for judicial review and found it to have sufficient merit to grant an order nisi was sufficient to warrant a stay of the CCA s 43 proceedings in the District Court pending the outcome of the judicial review proceedings. I observed that [27]:

 

To my mind, it is undesirable for there to be two hearings on the same issue whether the Determination is tainted by jurisdictional error - with the potential for the two judicial officers to make contrary findings.

 

21 The situation in the present case may be distinguished from the decision in State Side . In that case, the issue for the Supreme Court is the validity of the actual determination sought to be enforced in the District Court. In the present case, the determination of the Supreme Court will not invalidate the Determination. Rather, if the appeal is successful, that is, the approach in Blackadder is found to be in error, the decision will be to the effect that the Determination contains an error of law. There is no jurisdiction in the present appeal to then proceed to set aside the Determination, nor even to declare it to be invalid. I do not agree with the respondent's submission that State Administration Tribunal Act 2004 (WA) s 105(9) gives the Supreme Court the power to quash the Determination, that decision not being the subject of the appeal to SAT. The decision of the Supreme Court in the appeal, in effect, has the same impact as if the Supreme Court had reviewed and overturned the decision in Blackadder in an entirely unrelated matter.

 

22 It thus seems to me that the correct manner in which to approach the present application is to determine whether or not the Determination is attended by an error of law, and then exercise the discretion in CCA s 43. This primarily involves determining whether the decision in Blackadder is correct. Before doing so, it is instructive to set out the relevant provisions of the CCA.

 

Relevant provisions of the Construction Contracts Act 2004

 

23 CCA Part 2 deals with the content of construction contracts.

Division 1, s 9 to s 12, deals with prohibited provisions:

 

9. Prohibited: pay if paid/when paid provisions

 

A provision in a construction contract has no effect if it purports to make the liability of a party (A) to pay money under the contract to another party contingent, whether directly or indirectly, on A being paid money by another person (whether or not a party).

 

10. Prohibited: provisions requiring payment to be made after 50 days

 

A provision in a construction contract that purports to require a payment to be made more than 50 days after the payment is claimed is to be read as being amended to require the payment to be made within 50 days after it is claimed.

 

11. Prohibited: prescribed provisions

 

A provision in a construction contract has no effect if it is a provision that is prescribed by the regulations to be a prohibited provision.

 

12. Other provisions of contract not affected

 

A provision in a construction contract that has no effect because of section 9 or 11 or that is modified under section 10 does not prejudice or affect the operation of other provisions of the contract.

 

24 CCA s 13 to s 23 deal with implied terms. For present purposes, it is sufficient to quote s 13 to s 18:

 

13. Variations of contractual obligations

 

The provisions in Schedule 1 Division 1 are implied in a construction contract that does not have a written provision about variations of the contractor's obligations under the contract.

 

14. Contractor's entitlement to be paid

 

The provisions in Schedule 1 Division 2 are implied in a construction contract that does not have a written provision about the amount, or a means of determining the amount, that the contractor is entitled to be paid for the obligations the contractor performs.

 

15. Contractor's entitlement to claim progress payments

 

The provisions in Schedule 1 Division 3 are implied in a construction contract that does not have a written provision about whether or not the contractor is able to make a claim to the principal for a progress payment for the obligations the contractor has performed.

 

16. Making claims for payment

 

The provisions in Schedule 1 Division 4 are implied in a construction contract that does not have a written provision about how a party is to make a claim to another party for payment.

 

17. Responding to claims for payment

 

The provisions in Schedule 1 Division 5 about when and how a party is to respond to a claim for payment made by another party are implied in a construction contract that does not have a written provision about that matter.

 

18. Time for payment

 

The provisions in Schedule 1 Division 5 about the time by when a payment must be made are implied in a construction contract that does not have a written provision about that matter.

 

…

 

25 CCA Sch 1 Div 5 provides:

 

Division 5 — Responding to claims for payment

 

6. Interpretation in Division 5

 

In this Division —

 

payment claim means a claim —

 

(a) by the contractor to the principal for payment of an amount in relation to the performance by the contractor of its obligations under this contract; or

 

(b) by the principal to the contractor for payment of an amount in relation to the performance or non-performance by the contractor of its obligations under this contract.

 

7. Responding to a payment claim

 

(1) If a party that receives a payment claim —

 

(a) believes the claim should be rejected because the claim has not been made in accordance with this contract; or

 

(b) disputes the whole or part of the claim,

 

the party must, within 14 days after receiving the claim, give the claimant a notice of dispute.

 

(2) A notice of dispute must -

 

…

 

(f) if the claim is being rejected under subclause (1)(a) — state the reasons for the belief that the claim has not been made in accordance with this contract;

 

(g) if the claim is being disputed under subclause (1)(b) — identify each item of the claim that is disputed and state, in relation to each of those items, the reasons for disputing it; and

 

(h) be signed by the party giving the notice.

 

(3) Within 28 days after a party receives a payment claim, the party must do one of the following, unless the claim has been rejected or wholly disputed in accordance with subclause (1) —

 

(a) pay the part of the amount of the claim that is not disputed;

 

(b) pay the whole of the amount of the claim.

 

(4) Under this contract the principal is entitled to retain a portion of any amount payable by the principal to the contractor —

 

(a) subclause (3) does not affect the entitlement; and

 

(b) the principal must advise the contractor in writing (either in a notice of dispute or separately) of any amount retained under the entitlement.

 

…

 

The decision in Blackadder

 

26 In Blackadder the applicant applied pursuant to CCA s 46(1) to review a decision of an adjudicator to dismiss an adjudication application without a determination on the merits. Like the present case, the Tribunal found that the relevant contract between the parties did not contain any written provision about when and how a party is to respond to a claim for payment. The matter fell within CCA s 17 ([45] - [46]). However, the contract did contain a written provision about when a payment must be made, namely: 'At the end of following month' ([47]).

 

27 The issue then arose as to the extent of the terms in CCA sch 1 div 5 to be implied into the contract. The Tribunal held that the only provision in CCA sch 1 div 5 'about the time by when a payment must be made' (quoting from CCA s 18) was the introductory words of cl 7(3), being:

 

'Within 28 days after a party receives a payment claim'. The remaining words of cl 7(3) are 'about when and how to respond' (quoting from CCA s 17). The Tribunal arrived at this conclusion with 'considerable difficulty' ([50] - [51]):

 

Schedule 1 cl 7(3) of the CC Act provides that within 28 days of a party receiving a payment claim, it must, if appropriate, pay either the whole of the claim or that part that is not disputed. The only time element of that clause is the introductory words, '(w)ithin 28 days after a party receives a payment claim' (time phrase). This then begs the question as to the subject matter of the remainder of the clause. It must be said that we have had considerable difficulty in attempting to properly construe the scheme provided through s 17 and s 18 read with Sch 1 Div 5 of the CC Act. We have come to the conclusion that the only sensible answer is that the remainder of cl 7(3) and cl 7(4) of the CC Act constitute parts of the response to a payment claim, and therefore are 'about when and how to respond'. This is because s 17 and s 18 of the CC Act describe the provisions in Sch 1 Div 5 of the CC Act variously as provisions about when and how a party is to respond, or about the time when a payment is to be made. The entirety of the provisions in the schedule is therefore to be regarded is dealing with one or other of those subject matters. We think our conclusion in this regard is further strengthened when it is considered that cl 7(3) of the CC Act forms part of a self-contained code of conduct on the part of the party receiving the payment claim - see the reference in Sch 1 cl 7(3) to cl 7(1), and the reference in Sch 1 cl 7(4) to cl 7(3) - which is not conducive to easy severance, with the obvious exception of the time phrase. The result is that, in our view, if, as we have found, s 17 of the CC Act applies, everything within cl 7 with the exception of the time phrase must be implied into the contract. If s 18 applies, there must be payment within 28 days of claim in accordance with cl 7(3) of the CC Act.

 

As we have indicated, it is only with considerable difficulty that we have arrived at the above construction. We note the reporting functions of the Construction Contracts Registrar appointed under s 47 of the CC Act and respectfully suggest that the difficulties relating to the application of s 17 and s 18 and Sch 1 Div 5 of the CC Act could be usefully clarified by an appropriate amendment to s 17 and s 18…

 

28 After considering a number of other grounds, the Tribunal refused the application for review and affirmed the decision of the adjudicator.

 

The applicant's submissions on Blackadder

 

29 The applicant submitted that the decision in Blackadder is correct. In the present case, this has the effect that:

 

(a) by CCA s 17 the 'provisions in sch 1 div 4 about when and how a party is to respond to a claim for payment made by another party' are to be implied into the Agreements; and

 

(b) as there was a provision in the Agreements 'about the time by when a payment must be made', CCA s 18 does not apply, and the provisions of 'Schedule 1 Division 5 about the time by when a payment must be made' were not implied into the Agreements.

 

30 The net effect of this interpretation of CCA s 17 and s 18 is that the time for payment was 30 May 2011 and the adjudication application was commenced within time (20 June 2011). It followed that in the Determination, the adjudication did not make a jurisdictional error in relation to the application of CCA s 31(2)(a)(ii) as the application was prepared and served in accordance with CCA s 26.

 

31 Counsel for the applicant referred to five reasons why the interpretation adopted by the Tribunal in Blackadder was the correct one. The first was that CCA s 17 and CCA s 18 separate out two topics: 'when and how a party is to respond to a claim for payment' in s 17 and 'the time by when a payment must be made' in s 18. It is evident that CCA sch 1 div 5 deals with both 'when and how a party is to respond to a claim for payment' and 'the time by when a payment must be made'. By separating out the two topics, Parliament must be taken to have intended that only s 17 or s 18 may apply in a particular case, and that if only one applied, only the relevant provisions of CCA sch 1 div 5 would be implied. That is, only the missing terms would be implied. Put slightly differently, the implied terms fill in the gaps in the written terms.

 

32 The second is that by using the language of implied provisions, Parliament has drawn on an established common law contractual concept. Parliament has not used the language of a statutory direction. At common law '… for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract': BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, 283.

 

33 The third is that where Parliament intended the provisions of the CCA to override the contract entered into by the parties it has made this effect clear in the language used. The prohibitions in CCA s 9, s 10 and s 11 use language which expressly provides that a provision in the construction contract which contravenes the prohibition 'has no effect' (CCA s 9 and s 11) or is 'to be read as being amended to require' (CCA s 10). If the effect of CCA s 17 and s 18 was to override an express term of a construction contract, Parliament would have used the same language as found in CCA s 9, s 10 and s 11. The fact that it did not use the same language as found in CCA s 9, s 10 and s 11 in CCA s 17 and s 18 indicates an intention to achieve a different outcome. That different outcome is connoted by the use of the concept of an implied provision.

 

34 Fourth, the overall approach of the CCA is to preserve the freedom of parties to contract on the terms they consider appropriate subject to:

 

(a) certain limited prohibitions and modifications;

 

(b) implied terms where the contract does not contain a written provision about the named subject matter; and

 

(c) a general prohibition on contracting out of the operation of the CCA.

 

35. s53 This freedom of the parties to contract is evident in CCA s 12 and (2) which preserve the operation of other provisions of the contract when a particular provision is deemed to have no effect by operation of a prohibition. An approach by which implied terms are used only where there is a gap in the written provisions of the construction contract is consistent with the overall approach of, as far as possible, preserving the freedom of the parties to contract in the terms they consider appropriate.

 

36 The fifth is that the first three reasons are confirmed in the long title of the CCA which makes it clear that the object of the CCA is threefold:

 

(a) to prohibit or modify certain provisions in construction contracts;

 

(b) to imply provisions in construction contracts about certain matters if there are no written provisions about the matters in the contracts;

 

(c) to provide a means for adjudicating payment disputes arising under construction contracts, and for related purposes.

 

37. The CCA thus both regulates the provisions of construction contracts and provides for a means for adjudicating on payment disputes.

 

The respondent's submissions on Blackadder

 

38 The respondent submitted that the decision in Blackadder is incorrect. The correct application of CCA s 17 is that if the construction contract does not have a provision about when and how a party is to respond to a claim for payment made by another party, the provisions of sch 1 div 5 are to be implied into the contract in their entirety.

 

39 The respondent submitted that sch 1 div 5 is a complete code. If through either CCA s 17 or s 18 sch 1 div 5 applies, it applies in its entirety. Schedule 1 div 5 provides a series of steps for the identification of a payment dispute and payment of the undisputed portion of any payment claim (if any). The CCA does not contemplate the parties hopping 'on and off the steps' as the terms fill in gaps in the contract between the parties. In the present case, the contract 'made sense and could operate perfectly by the full operation of' CCA s 17, and there was thus no need to consider CCA s 18. To apply CCA s 18 would operate to exclude part of the operation of CCA sch 1 div 5 cl 7, in circumstances where there was no lawful power to do so.

 

40 The respondent then submitted that sch 1 div 5 deals with payment disputes, not common law disputes. The terms are implied not for common law purposes, but for, and only for, the determination of a payment dispute. Construction Contracts Act s 17, and through it sch 1 div 5, completely governs how to respond to a payment claim. Construction Contracts Act s 18 has no operation to set out how a party is to respond to a payment claim.

 

41 The respondent referred to comments in Blackadder , which I have quoted, to the effect that the Tribunal members saw the issue as being one of considerably difficulty, so much so that they recommended legislative reform.

 

Determination on Blackadder

 

42 As far as I am aware, the decision in Blackadder on the issue of CCA s 17, but not s 18, applying has not been the subject of consideration in any other decision of SAT. The decision in Blackadder was followed by Mr C Raymond and Ms J Hawkins in Longmont Consolidated Pty Ltd and Fleetwood Pty Ltd [2010] WASAT 22 and Longmont Consolidated Pty Ltd and Fleetwood Pty Ltd [2010] WASAT 23. In the facts of that case, both CCA s 17 and s 18 applied, and the entirety of sch 1 div 4 was implied into the relevant contract: [2010] WASAT 22, [42]. Another aspect of the decision in Blackadder , the interpretation of CCA s 6(a), was followed by Deputy President Sharp and Mr C Raymond in Fuel Tank & Pipe Pty Ltd and Decmil Australia Pty Ltd [2010] WASAT 165. It was not necessary for the Tribunal to consider the application of CCA s 17 and s 18. The interpretation of CCA s 6(a) in Blackadder was also adopted by Supplementary President Corboy and Mr C Raymond in Re Conneq Infrastructure Services (Australia) Pty Ltd and Sino Iron Pty Ltd [2012] WASAT 13. Again, on the facts, both CCA s 17 and s 18 applied.

 

43 There is a passing reference to the decision in Blackadder in Thiess [16], but not on this point. It is referred to by Hall J in Hire Access [26], but only in the context of his Honour stating that he was unable to make a determination on merits on the review application, a determination that would involve the decision in Blackadder .

 

44 I am thus not aware of any authority binding on me supporting (or contrary to) the decision in Blackadder on this point. In particular, I am not aware of any decision involving any Deputy President of SAT, whose decisions are at the same level of authority as a District Court Judge, meaning that I would follow the decision unless I was of the view that it was clearly wrong. The decision in Blackadder is by a Senior Member and a Member. I have approached the issue on the basis that I should consider afresh the interpretation of CCA s 17 and s 18 in the context of a contract that provides for the time by when a payment must be made (for the purposes of CCA s 18) but contains no provisions about when and how a party is to respond to a claim for payment made by another party (for the purposes of CCA s 17).

 

45 The general principles of statutory construction are summarised in the judgment of Martin CJ (with whom Newnes and Murphy JJA agreed) in Attorney-General (WA) v Schoombee [2012] WASCA 29 [29] - [30]:

 

The objective of statutory construction is to give to the words of the statutory provision the meaning which the legislature is taken to have intended them to have: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, [78] (McHugh, Gummow, Kirby & Hayne JJ); Lacy v Attorney-General (Qld) [2011] HCA 10; (2011) 242 CLR 573, [43] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).

 

The legislative intention to which reference is made in this context is not the ascertainment of the mental state of the legislators at the time the legislation was passed, either collectively or individually: see Zheng v Cai [2009] HCA 32; (2009) 239 CLR 446, [28]; Lacy [43]. Rather, the ascertainment of legislative intention is a statement of compliance with the established rules of construction known to parliamentary drafters and to the courts and which govern the relationships between the arms of government in a system of representative democracy (see Zheng v Cai and Lacy .

 

46 The Chief Justice continued that 'one of the well-established rules of statutory construction requires primary regard to be given to the natural and ordinary meaning of the words used in the statute' [31].

 

47 To my mind the natural and ordinary meaning of the words used in CCA s 17 and s 18 provide the answer to the interpretation issue. CCA s 17 does not provide that 'all' the provisions of sch 1 div 5 are to be implied into a construction contract that does not have a written provision about when and how a party is to respond to a claim for payment made by another party. Rather, only [my emphasis] 'the provisions of Schedule 1 Division 5 about when and how a party is to respond to a claim for payment made by another party are implied in a construction contract that does not have a written provision about that matter'. Likewise, CCA s 18 does not provide that 'all' the provisions of sch 1 div 5 are to be implied into a contract that does not have a written provision about the time by when a payment is to be made. Rather, only [again my emphasis] 'the provisions of Schedule 1 Division 5 about the time by when a payment must be made are implied into a construction contract that does not have a written provision about that matter'. The subject matter description limiting which of the provisions of sch 1 div 5 are to be implied must be given effect to. The fact that CCA s 17 and s 18 imply provisions with different subject matter descriptions makes it clear, in my view, that only the relevant subject matters required from sch 1 div 5 are to be implied into the contract.

 

48 I agree with the five reasons advanced by counsel for the applicant which I have set out above. To this I add the observation of the Tribunal in Blackadder that CCA s 13, s 14, s 15 and s 16 use different wording to that in s 17 and s 18. The former sections use the phrase: 'The provisions in Schedule 1 Division 5 are implied'. This denotes that the entirety of the provisions of the relevant division of sch 1 are to be implied. CCA s 17 and s 18 use the phrase: 'The provisions in sch 1 div 5 about … are implied'. If Parliament had intended the entirety of the provisions of sch 1 div 5 to be implied they could have used the same language as was used in CCA s 13 to s 16. It chose different language, which must be given effect to.

 

49 I therefore do not agree with the respondent's submissions that if CCA s 17 applies, then sch 1 div 5 applies in its entirety. This is inconsistent with the terms of both CCA s 17 and s 18. These sections only imply the provisions of sch 1 div 5 of a particular subject matter into the construction contract. Further, the fact that CCA s 17 and s 18 both draw on sch 1 div 5 strongly suggests an intention by Parliament that only one of those sections may apply in a particular case. I also do not agree that CCA s 18 has no effect in relation to the response to a 'payment dispute'. It is significant that neither CCA s 17 nor s 18 refer to a 'payment claim' or a 'payment dispute', both of which are defined terms. Rather, each has a generic reference to 'a payment'. This indicates Parliament is referring to the substantive terms of the contract, and not a more limited concept of a 'payment dispute' under the CCA.

 

50 On the respondent's interpretation, the following scenario could arise:

 

(a) the construction contract contains a detailed and carefully thought out set of written provisions as to when and how a party is to respond to a claim for payment made by the other, thus not triggering CCA s 17;

 

(b) the provisions in (a) do not contravene any of the prohibitions in the CCA;

 

(c) the construction contract contains a written provision about the time by which payment must be made in a pre-printed form with a blank space for the number of days to be inserted;

 

(d) by inadvertence, the blank space in ( c) is not completed;

 

(e) by operation of CCA s 18, as there is no written provision about the time by when payment must be made, all of the provisions of sch 1 div 5 are implied; or

 

(f) the effect of (e) is that the implied provisions in sch 1 div 5 about when and how a party is to respond to a claim for payment by another override the express written provisions on the same subject matter in the contract, notwithstanding that the contract does not fall within CCA s 17.

 

51 On the applicant's interpretation, in the above scenario, only CCA s 18 would apply, and only the 'provisions in Schedule 1 Division 5 about the time by when a payment must be made' would be implied.

 

52 In my view, in this scenario the interpretation proposed by the applicant produces both a pragmatic outcome and an outcome more consistent with the legislative regime of having two distinct buckets from which to draw from the provisions of sch 1 div 5, namely CCA s 17 and CCA s 18.

 

53 I do not agree with the respondent's submissions that the implied terms in the CCA are only implied for the purposes of determining a payment dispute and not for common law purposes. I have set out the long title to the CCA above. It is permissible to consider the long title to the CCA in order to confirm the ordinary meaning of the text of the legislation: Interpretation Act 1984 (WA) s 19. There are three sub points in the long title, the first two dealing with the terms of construction contracts and the third dealing with the determination of payment disputes. CCA Part 2 prohibits certain provisions and implies certain terms. These terms go well beyond those necessary for the determination of a payment dispute as set out in CCA Part 3. For example, CCA s 21 implies certain terms into a construction contract that does not contain a written provision about what is to happen to certain unfixed goods in the event of the principal or client becoming insolvent. It would be an odd, and undesirable, result if a payment dispute was determined on a particular basis because of provisions implied by the CCA, and money paid out as a consequence of a CCA s 43 determination (perhaps millions of dollars), only to have subsequent common law proceedings determined on a different basis (that is, without the provisions implied by the CCA), resulting in the repayment of some or all of that money (pursuant to CCA s 45).

 

54 I therefore come to the same conclusion as the Tribunal in Blackadder . Applying the law as I have determined it to the present case:

 

(a) the Agreements are construction contracts which do not contain written provisions about when and how a party is to respond to a claim for payment made by another party;

 

(b) by CCA s 17 the 'provisions in Schedule 1 Division 4 about when and how a party is to respond to a claim for payment made by another party' are to be implied into the Agreements; and

 

(c) there was a provision in the Agreements 'about the time by when a payment must be made';

 

(d) because of (c) CCA s 18 did not apply, and those provisions of 'Schedule 1 Division 5 about the time by when a payment must be made' were not implied into the Agreements;

 

(e) the provision in the Agreement about the time by when a payment must be made provided that the payment had to be made by the 30th of the month, relevantly 30 May 2011;

 

(f) no payment was made by 30 May 2011, therefore a payment dispute arose on the date;

 

(g) the adjudication application was commenced on 20 June 2011, within 28 days after the dispute arose;

 

(h) the application was prepared and served in accordance with CCA s 26 for the purposes of CCA s 31(2)(a)(ii); and

 

(i) the adjudicator did not commit an error in failing to dismiss the application because the application fell within CCA s 31(2)(ii).

 

Determination of CCA s 43 application

 

55 The applicant submitted that the discretion in CCA s 43 is wider than the review process undertaken to determine whether to issue an order nisi in judicial review proceedings. In particular, counsel submitted that the objective of the CCA to ensure the continuity of payment to sub-contractors may mean that the there are circumstances in which it would be just to grant leave to enforce a determination pursuant to CCA s 43, even when the Supreme Court had granted an order nisi.

 

56 In my view the order nisi review and the discretion in CCA s 43 have a substantial degree of overlap. This is evident from the overall similarities in the approach taken by Corboy J in Theiss and my assessment in Witham each pursuant to CCA s 43, with the order nisi review carried out by Kenneth Martin J in Anstee-Brook . In the present case, I do not need to make any statements of principle about the overlap in the two processes. It is sufficient for me to proceed on the basis that no application has been made for judicial review of the Determination. As the applicant stated in its written submissions, 'it would be a perverse outcome if the Respondent was effectively able to achieve a stay by having a grant of leave declined or adjourned, simply because the Respondent might make an application that he has not yet made' (par 26).

 

57 In the present case, as I have noted, the best that the respondent can achieve in the current Supreme Court appeal is a determination that the decision in Blackadder was incorrectly decided and that SAT erred in sending the adjudication back to the adjudicator for determination in accordance with the decision in Blackadder . The Supreme Court may comment in obiter dictum that the Determination is based on an error of law, but it has no power in the present appeal to formally declare the Determination to be invalid. This relevantly distinguishes the present case from a case like that in State Side in which a Supreme Court justice has undertaken an order nisi review and determined that the application for judicial review of the determination the subject of the CCA s 43 application has sufficient merit to proceed to a final hearing.

 

58 The respondent submits that a further reason for not enforcing the Determination is that there is a 'real or serious' risk that the applicant may not have the funds to repay it should that ultimately be ordered as a result of subsequent common law proceedings. I do not give any weight to this submission for two reasons. The first is that giving weight to this factor would be contrary to the purposes of the CCA which make it clear that the insolvency risk pending determination of an underlying common law dispute is to be borne by the principal not the contractor. The second is that, in any event, there is no evidence to support a conclusion that there is a risk that the applicant will not be able to repay the amount of the Determination if ultimately required to do so in subsequent common law proceedings.

 

59 In the circumstances of the present case, I am satisfied that it is appropriate to grant the applicant leave to enforce the Determination. I will hear from counsel as to final orders and costs. I will also hear from the parties in relation to the process for determining any consequential orders pursuant to Civil Judgments Enforcement Act 2004 (WA), in particular, any application for a suspension order.