[2012] WASAT 166

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM : COMMERCIAL & CIVIL

ACT : CONSTRUCTION CONTRACTS ACT 2004 (WA)

CITATION : TORMAZ PTY LTD and HIGH RISE PAINTING CONTRACTORS PTY LTD [2012] WASAT 166

MEMBER : MS NATASHA OWEN-CONWAY (MEMBER)

HEARD : 14 FEBRUARY 2012

DELIVERED : 15 AUGUST 2012

FILE NO/S : CC 1753 of 2011

BETWEEN : TORMAZ PTY LTD

Applicant

AND

HIGH RISE PAINTING CONTRACTORS PTY LTD

Respondent

Catchwords:

Construction Contracts Act 2004 (WA) - Decision made under s 31(2)(a) of the Construction Contracts Act 2004 - A person who is 'aggrieved' as referred to in s 46(1) of the Construction Contracts Act 2004 - Decision to dismiss only part of application for adjudication - Aggrieved by decision not to dismiss whole of application for adjudication

Legislation:

Construction Contracts Act 2004 (WA), s 3, s 26, s 31(2)(a), s 31(2)(a)(ii), s 31(2)(b), s 45(4), s 46(1)

State Administrative Tribunal Act 2004 (WA), s 17, s 29(3)

Result: Application dismissed

Category: B

Representation:

Counsel:

Applicant : Mr K Dundo and Ms E Cavanagh

Respondent : Ms Visscher

Solicitors:

Applicant : Q Legal

Respondent : N/A

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

Perrinepod Pty Ltd and Georgiou Building Pty Ltd [2010] WASAT 136

Perrinepod Pty Ltd and Georgiou Building Pty Ltd [2011] WASCA 217

Silent Vector Pty Ltd T/As Sizer Builders and Squarcini [2008] WASAT 39

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 Tormaz Pty Ltd was the respondent to an application for adjudication brought by High Rise Painting Contractors Pty Ltd. The adjudicator dismissed part of the application for adjudication pursuant to s 31(2)(a)(ii) of the Construction Contracts Act 2004 (WA), upon the basis that the application, with respect to the disputed payment claim in the sum of $13,188 plus GST, was not prepared and served in accordance with s 26 of the Construction Contracts Act 2004. High Rise Painting Contractors Pty Ltd did not seek a review of the adjudicator's decision made pursuant to s 31(2)(a)(ii) of the Construction Contracts Act 2004. Instead, Tormaz Pty Ltd made an application pursuant to s 46(1) of the Construction Contracts Act 2004 to review the adjudicator's decision to dismiss only part of the application for adjudication and not the whole of the application for adjudication.

2 The Tribunal concluded on a preliminary issue, that s 46(1) of the Construction Contracts Act 2004 did not entitle Tormaz Pty Ltd to make an application for review of the adjudicator's decision to dismiss only part of the application for adjudication and not the whole of that application for adjudication. The Tribunal concluded that Tormaz Pty Ltd's application sought a review of the adjudicator's decision not to dismiss the whole of the application for adjudication, and that such an application was not within the contemplation of s 46(1) of the Construction Contracts Act 2004. The application for review made by Tormaz Pty Ltd was dismissed.

The facts

3 The facts of this application are not in dispute. On 21 September 2011, High Rise Painting Contractors Pty Ltd (High Rise), the respondent to these proceedings, made an application for adjudication pursuant to the Construction Contracts Act 2004 (WA) (CC Act). The application was made against Tormaz Pty Ltd trading as SM Building and Maintenance (Tormaz), the applicant in these proceedings. The appointor was the Master Builders Association, who appointed Mr M Charteris (adjudicator) as the adjudicator in the matter.

4 On 26 October 2011, the appointed adjudicator made a decision that the application for adjudication in respect of High Rise's payment dispute in the sum of $13,188 plus GST, was not prepared and served in accordance with s 26 of the CC Act, in that it was made more than 28 days after the payment dispute arose in respect of that payment claim (see para 62 of the 'Adjudicator's Decision for Adjudication Identification number No. 23-11-05' dated 26 October 2011 (Decision)). The adjudicator 'dismissed' that part of High Rise's application for adjudication.

5 The adjudicator concluded that the application for adjudication, insofar as it concerned the balance of the payment dispute(s) which were the subject of High Rise's application for adjudication, was made within time and was otherwise within his jurisdiction to determine (see paras 71 and 75 of the Decision). The adjudicator proceeded to determine the remaining payment dispute(s) which were the subject of High Rise's application for adjudication, on the merits upon the information provided to him by the parties in the application and response.

6 The adjudicator concluded that on the basis of the information presented by the parties, Tormaz was liable to pay to High Rise the sum of $70,642 including GST. The adjudicator made a 'determination' that Tormaz was to pay High Rise the sum of $70,462 including GST within seven days of the date of his determination (Part 1, page 3, number 2 of the Decision).

7 High Rise did not seek a review by the Tribunal, pursuant to s 46(1) of the CC Act, of the adjudicator's decision to dismiss that part of High Rise's application for adjudication concerning the payment dispute in the sum of $13,188 plus GST.

8 Tormaz, however, made application to the Tribunal for a review of the adjudicator's decision pursuant to s 46(1) of the CC Act.

The application

9 The application is made pursuant to s 46(1) of the CC Act and notes, '[d]ecision under s 31(2)(a)'. The orders sought are referred to in Annexure A. The preamble of Annexure A provides, relevantly:

Pursuant to section 31(2)(a)(ii) of the [CC Act], the Decision[-]Maker must dismiss an application without making a determination of its merits if the application has not been prepared and served in accordance with section 26 of the [CC Act]. The Decision includes a determination that part of the Original Application be dismissed pursuant to section 26(1) for being out of time, which is a reviewable decision pursuant to section 46(1) of the [CC Act] (Reviewable Decision).

10 Annexure A also states that the review jurisdiction of the Tribunal (s 17 of the State Administrative Tribunal Act 2004 (WA) (SAT Act)) is enlivened by s 46(1) of the CC Act. Tormaz seeks the following orders pursuant to s 29(3) of the SAT Act:

1. Affirm the Reviewable Decision, pursuant to section 29(3)(a) of the SAT Act, with respect to the determination that a payment dispute does not arise for the purpose of section 6 of the [CC Act] where a payment claim as defined by section 3 of the [CC Act] is refreshed or repeated, as referred to at paragraph 58 of the Decision (Determination);

2. Vary the Reviewable Decision pursuant to section 29(3)(b) of the SAT Act by applying the Determination as referred to in paragraph 1 above, to the entirety of the payment dispute set out at paragraph 6 of the Original Application;

3. Making any further variations to the Decision necessary for consistency pursuant to section 29(3)(b) of the SAT Act; and

4. Invite the Decision[-]Maker to reconsider the Reviewable Decision pursuant to section 31 of the [CC Act] noting that SM Building should be provided with an opportunity to respond to the [sic] any payment claims or payment disputes that the Decision[-]Maker considers to exist other than those set out at paragraph[s] 5 and 6 of the Original Application.

5. Alternatively, set aside the Reviewable Decision pursuant to section 29(3)(c)(i) of the SAT Act and substitute its own decision, determining the proper application of payment claim and payment dispute for the purposes of the [CC Act] to the Original Application and in so doing, apply the Determination as referred to in paragraph 1 above to the entirety of the Original Application[.]

11 In essence, Tormaz asserts that the adjudicator should have dismissed the whole of the application for adjudication upon the basis that all of the disputed payment claims included in the application for adjudication were 'refreshed' or 'repeated'. This is clear from the terms of the orders sought in proposed orders 2 and 5 of Tormaz's application referred to above. It was not Tormaz's application that the adjudicator should not have dismissed that part of the application for adjudication concerning the payment dispute in the sum of $13,188 plus GST. On the basis of the application filed in the Tribunal by Tormaz, there was no suggestion that Tormaz was aggrieved by the decision to dismiss that part of the application for adjudication concerning the sum of $13,188 plus GST, in that Tormaz had lost the opportunity of the adjudicator determining that payment dispute on its merits. On the contrary, Tormaz sought orders from the Tribunal that would result in the whole of High Rise's application for adjudication being dismissed.

12 Further, the grounds for the review, identified in Annexure B to the application, all complain that the adjudicator should have dismissed the whole of the application for adjudication. The grounds are very lengthy and are summarised by the Tribunal as follows:

• Ground 1 - the application for adjudication was made in relation to the payment claim for $76,646.90, which payment claim had been disputed, whereas the adjudicator made a determination based on the disputed payment claims as he had identified them in his reasons, which payment claims were not as identified in the application.

• Ground 2 - the adjudicator failed to properly apply the meaning of 'payment claim' as defined by s 3 of the CC Act, to the disputed payment claim, the subject of the application for adjudication.

• Ground 3 - the adjudicator 'determined' that the payment claim in respect of the sum of $13,188 plus GST was dismissed, but failed to determine when and how the dispute as to the payment claim arose.

• Ground 4 - High Rise was permitted a further opportunity to make submissions, but Tormaz was not provided an opportunity to make further submissions, as a consequence of which the adjudicator did not adjudicate the payment dispute which was the subject of the original application, but dismissed the payment claim identified by the adjudicator (that is, the payment claim in respect of the sum of $13,188 plus GST) without determining when the payment dispute arose and without providing Tormaz with an opportunity to respond.

The issues

13 The first issue in this application is: whether a respondent to an application for adjudication has a right of review of a decision to dismiss only part of an application for adjudication pursuant to s 46(1) of the CC Act. This issue, on the grounds identified in the application, has two limbs:

1) Whether the decision to dismiss an application for adjudication in part in respect of one or more, but not all of, the disputed payment claims comprised in that application for adjudication, is also a decision not to dismiss the balance of the application for adjudication.

2) If so, is that decision not to dismiss an application for adjudication a decision in respect of which an application may be made for review to the Tribunal pursuant to s 46(1) of the CC Act?

14 For the reasons stated herein, the Tribunal concludes that the application for the review of the decision to dismiss only part of an application for adjudication and not the whole, is an application for the review of the decision not to dismiss the whole of the application for adjudication, and s 46(1) of the CC Act does not confer jurisdiction upon the Tribunal to review a decision not to dismiss an application for adjudication.

The proceedings in the Tribunal

15 The application was listed for an initial directions hearing on 24 November 2011, at which time the Tribunal identified the preliminary issue to be determined by the Tribunal and made orders for the filing and serving of a statement of issues, facts and contentions and submissions.

16 On 15 December 2011, Tormaz filed its submissions. On 17 January 2012, High Rise filed its statement of issues, facts and contentions and its submissions.

17 The preliminary issue was listed for hearing on 14 February 2012, at which time Tormaz handed the Tribunal with additional short written submissions. The Tribunal made an order for the parties to file any additional submissions by 29 February 2012. The parties filed their additional submissions on 29 February 2012.

The law

18 Section 46(1) of the CC Act provides a limited right of review by the Tribunal of a decision made by an adjudicator pursuant to s 31(2)(a) of the CC Act:

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.

19 In Perrinepod Pty Ltd and Georgiou Building Pty Ltd [2011] WASCA 217 (13 October 2011) (Perrinepod WASCA), Murphy JA (with whom Martin CJ agreed) held at [79] that:

[a] reference in s 46(1) to a 'decision made under section 31(2)(a) [of the CC Act] can only be to a decision to dismiss an adjudication application without making a determination on the merits[.]

20 Further, McLure JA held that:

[a] failure or omission to dismiss is not a decision under s 31(2)(a).

21 As a consequence, the Court of Appeal unanimously held that an omission, failure or decision not to dismiss an application for adjudication is not capable of review by the Tribunal pursuant to s 46(1) of the CC Act.

22 In concluding that s 46(1) of the CC Act did not allow for a review of a decision not to dismiss an application for adjudication, Murphy JA stated at [82] in Perrinepod WASCA:

… There is no reason why a respondent to an adjudication application could not be aggrieved by a decision to dismiss the application. One example would be where the respondent is of the view, contrary to the applicant's assertions, that it in fact owes no money and is desirous of having an early determination made to that effect.

Tormaz's submissions

23 In this application, Tormaz originally challenged the adjudicator's decision to dismiss because he dismissed only part of the application for adjudication, and, for various reasons, the adjudicator should have dismissed the whole of the application for adjudication. The Tribunal member put to counsel for Tormaz during the directions hearing on 24 November 2011, that a statement or assertion that Tormaz was aggrieved by a decision to dismiss only part of the application for adjudication was, in substance, the same as a statement or assertion that Tormaz was aggrieved by the decision not to dismiss the whole application. The Tribunal put to counsel for Tormaz that, as a consequence of the decision to dismiss part of the application for adjournment, there was no determination that Tormaz was to pay High Rise the sum of $13,188 plus GST, and that Tormaz was not aggrieved by the decision to dismiss that part of the application for adjudication. Counsel for Tormaz rejected that categorisation and claimed to be aggrieved by the adjudicator's decision to dismiss nonetheless.

24 Following that directions hearing, the Tribunal allowed the parties to file additional submissions. Tormaz filed written submissions dated 15 December 2011, and submitted at para 29 thereof:

The applicant is aggrieved by the Reviewable Decision [that is the decision to dismiss only part of the application for adjudication] as the Adjudicator did not confirm that the Variations were not payable thereby preventing any contractual claim by the Respondent.

25 In short, from 15 December 2011, Tormaz asserted that it was aggrieved by the failure of the adjudicator to determine the payment dispute in the sum of $13,188 plus GST, on the merits, in its favour – that is, that on the merits, the sum was not payable by Tormaz to High Rise. Such a hypothetical outcome would have resulted in a determination by the adjudicator that that sum is not to be paid by Tormaz to High Rise. In fact, the same practical outcome was achieved by the adjudicator dismissing that part of the application for adjudication concerning the payment dispute in the sum of $13,188 plus GST - there was no determination that Tormaz was to pay High Rise the sum of $13,188 plus GST.

26 Further, the assertion that Tormaz was aggrieved by the decision to dismiss that part of the application for adjudication concerning the sum of $13,188 plus GST made on 15 December 2011, is not consistent with the orders sought by Tormaz in its application - that the whole of the application should have been dismissed - that is, without a determination on the merits.

High Rise's submissions

27 High Rise made the following submissions, as summarised by the Tribunal:

1) The application for adjudication may involve and seek adjudication of a number of disputed payment claims (Silent Vector Pty Ltd T/As Sizer Builders and Squarcini [2008] WASAT 39 (Silent Vector); Perrinepod Pty Ltd and Georgiou Building Pty Ltd [2010] WASAT 136 (Perrinepod WASAT)).

2) An adjudicator may dismiss part of an application for adjudication where that part of the application concerns a disputed payment claim, with respect to which the adjudicator has no jurisdiction and must dismiss that part of the application pursuant to s 31(2)(a) of the CC Act (Silent Vector and Perrinepod WASAT).

3) After an adjudicator concludes that an application for adjudication (or part thereof) is within the adjudicator's jurisdiction, the adjudicator must proceed to make a determination of the same on the merits (s 31(2)(b) of the CC Act).

4) Section 46(1) of the CC Act confers jurisdiction on the Tribunal to review a decision to dismiss an application for adjudication, but does not confer on the Tribunal any jurisdiction to review an adjudicator's determination (Perrinepod WASCA and s 31(2)(b) of the CC Act).

5) Section 46(1) of the CC Act does not confer any jurisdiction on the Tribunal to review a decision not to dismiss an application for adjudication (Perrinepod WASCA).

28 The Tribunal agrees with these submissions.

Consideration

29 Whilst there may be cases where a respondent to an application for adjudication may be aggrieved by the decision made pursuant to s 31(2)(a) of the CC Act, in the sense referred to by Murphy J in Perrinepod WASCA, this application by Tormaz is not one of them, because:

1) The orders sought by Tormaz are to the effect that all of the application for adjudication should have been dismissed without a consideration of the merits, because the whole of the application concerned payment claims that were 'refreshed' or 'repeated'.

2) All of Tormaz's grounds identified in its application to the Tribunal complain that the adjudicator failed to dismiss the whole of the 'Original Application', which, in Tormaz's submission, was a disputed payment claim in the sum of $76,646 and not three separate payment disputes as identified by the adjudicator.

3) Paragraph 19 of Tormaz's grounds submit that the Tribunal:

… should find that the Payment Claim the subject of the Original Application repeats or refreshes a series of payments claims previously made to and disputed by the Applicant in 2010, therefore the Original Application must be dismissed as it does not comply with section 26 of the [CC Act].

30 All of these aspects of the application by Tormaz seek to persuade the Tribunal that the adjudicator's decision to dismiss that part of the application for adjudication concerning the payment dispute in the sum of $13,188 plus GST, should be extended to the balance of the application that was not dismissed. These aspects of the application by Tormaz are not consistent with its latter assertion, that it is aggrieved by the decision to dismiss the application for adjudication concerning the sum of $13,188 plus GST, because it did not receive the benefit of a determination on the merits by the adjudicator that no part of that sum was payable to High Rise. In truth, Tormaz's application is for a review of the adjudicator's decision not to dismiss the whole of the application for adjudication made by High Rise against Tormaz.

31 As to the alleged deprivation of a determination on the merits, as asserted by Tormaz on 15 December 2011, the value of such a determination as described by Tormaz is not clear. A determination on the merits by the adjudicator does not have any binding effect on any other court, arbitrator or tribunal that is charged with the jurisdiction and power to finally determine the rights and liabilities of the parties in respect of the disputed payment claims. The rights of the parties, following an adjudicator's determination pursuant to the CC Act, is as provided for in s 45 of the CC Act:

(1) This Part does not prevent a party to a construction contract from instituting proceedings before an arbitrator or other person or a court or other body in relation to a dispute or other matter arising under a contract.

…

(4) An arbitrator or other person or a court or other body dealing with a matter arising under a construction contract -

(a) must, in making any award, judgment or order, allow for any amount that has been or is to be paid to a party under a determination of a payment dispute arising under a contract; and

(b) may make orders for the restitution of any amount so paid, and any other appropriate orders as to such a determination.

32 As explained in the Second Reading speech:

If a party is not satisfied, it retains its full rights to go to court or use any other dispute resolution mechanism available under the contract. In the meantime, the determination stands, and any payments ordered must be made on account pending an award under the more formal and precise process. (Hansard, Western Australia, Parliamentary Debates, Legislative Assembly, 3 March 2004 (AJ MacTiernan, Minister for Planning and Infrastructure) at 275).

33 Whilst it might be bound to comply with a determination, Tormaz is not obliged to accept the determination for all time as a statement of its final rights and liabilities, viz High Rise. Tormaz may litigate the dispute in a court of competent jurisdiction. In the meantime, Tormaz must comply with the determination. Any court, arbitrator or tribunal that makes a final judgment, award or order on the parties' rights and liabilities will make that final judgment, award or order based on all of the evidence before it and submission made to it, and will have no, or at best little, regard to the reasoning of the adjudicator. Further, any court, arbitrator or tribunal that makes a final judgment, award or order on the parties' rights and liabilities must take into account any monies paid pursuant to an adjudicator's determination in making a final judgment, award or order (s 45(4) of the CC Act). The Tribunal finds that Tormaz is not aggrieved by the decision to dismiss the disputed payment claim in the sum of $13,188 plus GST in the manner described ('preventing' any contractual claim).

The Tribunal's decision

34 For these reasons, and consistently with the Western Australian Supreme Court of Appeal's judgment in Perrinepod WASCA, this application is dismissed on the basis of a determination of the preliminary issue and conclusion that Tormaz, the respondent to an adjudication application, is not entitled to seek a review of the adjudicator's decision to dismiss only part of that application for adjudication and not the whole of that application in the Tribunal pursuant to s 46(1) of the CC Act. The Tribunal concludes that Tormaz's application, in truth, seeks a review of the adjudicator's decision not to dismiss the application for adjudication, which is not a decision that can be the subject of a review application to the Tribunal pursuant to s 46(1) of the CC Act. Further, the Tribunal finds in this matter that Tormaz is not aggrieved by the decision to dismiss that part of the application for adjudication in respect of the sum of $13,188 plus GST, for the purposes of s 46(1) of the CC Act as alleged.

Order

1. The application for review pursuant to s 46(1) of the Construction Contracts Act 2004 (WA) is dismissed.

I certify that this and the preceding [34] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MS NATASHA OWEN-CONWAY, MEMBER