[2013] WASC 67

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS

CITATION : TRIPLE M MECHANICAL SERVICES PTY LTD -v- ELLIS [2013] WASC 67

CORAM : EM HEENAN J

HEARD : 27 FEBRUARY 2013

DELIVERED : 27 FEBRUARY 2013

FILE NO/S : CIV 1318 of 2013

MATTER : In the matter of an application for a Writ of Certiorari against David Scott Ellis as adjudicator under the Construction Contracts Act 2004

BETWEEN : TRIPLE M MECHANICAL SERVICES PTY LTD

Applicant

AND

DAVID SCOTT ELLIS

First Defendant

UNITED INDUSTRIES (WA) PTY LTD

Second Defendant

Catchwords:

Prerogative writ - Certiorari - Ex parte application - Order nisi - Stay of the effect of determination

Legislation:

Construction Contracts Act 2004 (WA)

Electronic Transactions Act 2001 (WA)

Civil Judgments Enforcement Act 2004 (WA)

Result:

Order nisi granted

Stay of adjudication determination granted

Category: B

Representation:

Counsel:

Applicant : Mr F G Kalyk

First Defendant : No appearance

Second Defendant : No appearance

Solicitors:

Applicant : Rockliffs

First Defendant : No appearance

Second Defendant : No appearance

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

Perrinepod Pty Ltd v Georgiou Building Pty Ltd (2011) WASCA 217

Re Graham Anstee-Brook; Ex Parte Karara Mining Ltd (2012) WASC 129

Witham v Raminea Pty Ltd [2012] WADC 1

1 EM HEENAN J : There is before the court a notice of originating motion, brought on as an urgent matter, seeking an order nisi for a writ of certiorari to quash or set aside a decision an adjudicator made under the Construction Contracts Act 2004 (WA). This notice of motion has been heard this morning ex parte in circumstances where the first respondent, the adjudicator, has been on notice of the application, but has informed the applicant's solicitors that he does not wish to be heard and submits to any order of the court, except as to costs.

2 I have been informed that the application has been made on notice to the second respondent, the principal other protagonist, but that the second respondent has sought a deferment of the hearing for three days, in order to become better apprised of the position. The second respondent has not sought to appear, as I have already said. Nevertheless, in view of the urgency of the matter, I am satisfied that it should be dealt with ex parte although, for reasons which follow, there will be an opportunity for the second respondent to apply, either on 18 March or before then on 48 hours' notice, to discharge or vary any part of the order which I propose to make.

3 The issue concerns an adjudication made on 14 February 2013 by the first respondent under the provisions of s 32 of the Construction Contracts Act 2004 . The adjudication concerns a payment dispute as defined by s 6 of that Act and, in short, concerns what, if any, amount is payable by the present applicant, whom I shall refer to as Triple M, to the second respondent, United Industries WA Pty Ltd, for variations alleged to have been authorised by a contract between those parties concerning the preparation of steel work for airconditioning plant and equipment to be installed at the Fiona Stanley Hospital under a contract between Triple M and the principal contractor, United Industries being the subcontractor to Triple M for a portion of that airconditioning work.

4 The value of the airconditioning contract initially is said to have been $2.9 million or thereabouts, and the amount determined by the adjudicator under the determination which is challenged is an amount of $458,895 plus GST. The effect of the determination made by the adjudicator is prescribed by the Construction Contracts Act and, for present purposes, the significant consequences are that the adjudication can be enforced as if were a judgment under the provisions of the Civil Judgments Enforcement Act 2004 (WA) and, perhaps more importantly, if not satisfied, will justify a suspension of all further works by the subcontractor, the second respondent under this contract, which is still yet to be completed and is presently at a crucial final stage.

5 The grounds proposed to support the claim for certiorari in the originating summons are, first, that the adjudicator fell into jurisdictional error in his decision in that (a) he failed to have regard to the response prepared by the applicant and served on the adjudicator on 31 January 2013; (b) he failed to have regard to the response prepared by the applicant and served on the adjudicator on 1 February 2013; and (c) he failed to consider the question on which the dispute was to be determined. Each of those subparagraphs is supported by extensive particulars, which I shall not here recite.

6 The second ground is that the adjudicator failed to bona fide exercise his powers as adjudicator for the purposes required by the Construction Contracts Act 2004 , in that (a) he failed to determine the value of the claim; (b) he failed to have regard to the applicant's responsive submissions; and (c) he failed to consider the construction contract terms. Again, each of those subparagraphs is supported by extensive particulars, which I will not set out.

7 Finally, ground 3 is that:

The adjudicator failed to afford to the applicant procedural fairness in relation to the payment dispute.

Again, there are particulars which are set out in the notice of originating motion, which I need not mention.

8 These grounds need to be understood in the light of the provisions dealing with adjudication of disputes set out in the Construction Contracts Act and s 27 of which provides that:

Any person responding to an application for adjudication shall within 14 days after the date on which that party is served with an application for adjudication prepare a written response and serve it on the applicant and any other party who has been served and the appointed adjudicator.

9 Section 27(2) sets out the formal requirements for such a response, including in s 27(2)(c) that it must set out or have attached to it all the information, documentation and submissions on which the party making it relies in the adjudication. The essential controversy in this present case is whether or not the response prepared and submitted by the applicant, the second respondent, was late and if it was, whether the adjudicator had the power and the discretion to consider it, notwithstanding that it was filed late, on that hypothesis.

10 In determining that question, the present applicant submits that it is necessary for the court to take into account the object of the adjudication process as defined by s 30, namely that the object of such an adjudication of a payment dispute is to determine the dispute fairly and as quickly, informally and inexpensively as possible. Section 32(1)(a) requires the adjudicator to act informally and, if possible, to make the determination on the basis of the application and its attachments and, if the response has been prepared and served in accordance with s 27, the response and its attachments, which begs the question whether or not the response can be considered if filed late, and s 32 (2), which gives ample powers for an adjudicator to request a party to submit further documentation or responses without any reference being made to any time limit for doing so.

11 In this particular case, the second respondent availed of the adjudication procedure. The first respondent was appointed adjudicator. The response was served by the second respondent on the applicant and the applicant, therefore, became bound to file a response and any attachments in accordance with s 27, if it wished to do so. It did wish to do so and it transmitted a response to the adjudicator, and it would seem to the second respondent, no issue yet arising on that question, by electronic means.

12 The response by the applicant can be found at page 328 of the affidavit of Mr Michael, sworn in support of this application, and it runs to 16 pages, that is to page 343, and there is no doubt that that was received by the adjudicator and within time. The response also included the annexures which were contemplated under s 27. They were very extensive and in the present papers before the court run from pages 384 to 572 at least, and it is at that point that the issue arises. These were in the form of PDF or other data carrier methods, sent via 44 emails by the applicant to the second respondent. Some were RAR files in certain form and others were files in what are called YouSendIt form.

13 They, together with the submissions, reached the adjudicator on the last or 14th day. The adjudicator was not able to open the annexures, although he could open the submissions. Quite why he could not open the annexures is not determined on the present papers conclusively, but it appears that his computer did not have the software required to open some of the compacted data which was contained in the annexures. It is the case for the applicant that even if the first respondent did not have that software, it was readily available and could be downloaded from respected and safe sources within the Internet, so as to equip his computer with a method of decompressing the data and having access to it.

14 This leads the applicant to submit that within the meaning of s (1)(a) and s 14 of the Electronic Transactions Act 2003 (WA), these particular attachments were or were to be regarded as having been transmitted and received on the date of dispatch. I shall not go into the provisions of those sections at the moment, beyond saying that the submissions of the applicant seem to be tenable or arguable in this respect. If those submissions were to be accepted, then of course the annexures would have been received by the adjudicator within time. If they are not accepted, the annexures would have been received at the most a day late, because the evidence is that by a combination of factors, the adjudicator was able to have access to the annexures by the use of different software the following day.

15 What is clear, however, is that in conducting his determination, the adjudicator considered that he was bound to exclude any of the evidence or materials contained in the applicant's attachments because they were, on his view, received late. The first respondent in this regard refers at pars 46 to 50 inclusive in his reasons for the determination to consideration of the question of whether or not he was able to take into account a response received late.

16 In this regard, he referred to the decision of the Court of Appeal in Perrinepod Pty Ltd v Georgiou Building Pty Ltd (2011) WASCA 217 and, in particular, to the judgment of McLure P dealing with s 31(2)(a), where there is some support for the view that timetables cannot be ignored without immutable adverse consequences. On the other hand, this differs from Le Miere J in Re Graham Anstee-Brook; Ex Parte Karara Mining Ltd (2012) WASC 129 which, without determining the question, plainly contemplated the possibility that there was at least a discretion by the adjudicator to continue to consider a response or annexures received after the expiration of the time limit.

17 The adjudicator preferred the view of Gething C in the District Court in Witham v Raminea Pty Ltd [2012] WADC 1, which considered the time limit to be mandatory. It seems that there is no authoritative decision on whether or not, in circumstances such as this, there was at least a discretion to consider the materials if they were filed after the expiration of the time limit, which is the second contingency for this purpose raised by the applicant.

18 It seems to me that that question is arguable, having regard to the scheme of the Act and the need to conduct proceedings informally and fairly, and that the adjudicator, having considered himself bound to disregard the annexures to the applicant's submissions, may have fallen into a situation where there was jurisdictional error and a failure to provide procedural fairness.

19 There is a second broad basis to the applicant's contentions, and it is that the adjudicator failed to address the essential question which was posed for his determination when dealing with the payment dispute; that is, what was the nature of the contractual entitlement for the payment of variations claimed by the applicant. When I say 'the applicant' I refer to the applicant before him, the present second respondent. This depends upon the construction of the terms of the contract between the applicant and the second respondent, which is to be found at vol 2, page 104 of the affidavit of Mr Michael already mentioned.

20 At page 105 there is reference to an entitlement to variations, and this stipulates that they should be priced against the provided schedule of rates forming part of the contract. It seems reasonably clear, or at least arguable, that in conducting the determination in the present case the learned adjudicator did not address the schedule of rates to determine the value of the variations, but followed the process urged upon him by the second respondent, which is more fully explained in par 92 of the adjudicator's reasons.

21 The process adopted was to determine the value of the additional work to be done by reference to the value of the work originally within the scope of the contract compared to the value of the work which had to be done. The process which was followed, as described in the following paragraphs of the adjudication, does not appear to deal with the question of the value of the works by reference to the schedule of rates in the contract. If that were to turn out to be the case, it would seem that there is an argument, at least tenable at prima facie level, that the question required of the adjudicator had not been directly addressed or answered and that that would, therefore, amount to a jurisdictional error, justifying intervention by a judicial review in the form of certiorari.

22 I am satisfied that these matters are arguable and that there should, therefore, be a grant of an order nisi for certiorari, returnable before a single judge at a date to be fixed and I will make that order. I do not consider that I should refer this matter to the Court of Appeal, notwithstanding the motion to do so in the originating motion, on the basis that there is no existing line of authority which would inhibit a single judge of this court from making an authoritative determination which could, if necessary, then be reviewed by the Court of Appeal in the exercise of the ordinary appellant jurisdiction. There is, therefore, no occasion which would prevent this dispute being resolved authoritatively by a single judge and it would not be the best use of the resources of this court or of the limited time available to the Court of Appeal for such a matter to be referred to the appeal division in the first instance.

23 The applicant has also sought a stay of proceedings of the determination pursuant to O 56 r 3 of the Rules of the Supreme Court . I am satisfied that a short stay should be granted to prevent the disruption which might otherwise occur from any immediate suspension of the works by the second respondent, but that that stay should be for no longer than is necessary to allow the second respondent an application to appear and argue whether or not it should be discharged or continued on different terms. For that reason, I will grant a stay of the effect of the determination until 18 March 2013, but there will be liberty to any interested party to apply on 48 hours' notice to vary or discharge the stay before then.