[2014] WASAT 59

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM : COMMERCIAL & CIVIL

ACT : CONSTRUCTION CONTRACTS ACT 2004 (WA)

CITATION : MRCN PTY LTD T/AS WESTFORCE

CONSTRUCTIONS and ABB AUSTRALIA PTY LTD [2014] WASAT 59

MEMBER : DR B DE VILLIERS (MEMBER)

HEARD : 21 MAY 2014

DELIVERED : 3 JUNE 2014

FILE NO/S : CC 337 of 2014

BETWEEN : MRCN PTY LTD T/AS WESTFORCE

CONSTRUCTIONS

Applicant

AND

ABB AUSTRALIA PTY LTD

Respondent

Catchwords:

Construction contract - Meaning of 'hearing de novo' under Construction Contracts Act 2004 (WA) - Discretion to allow additional material upon review - Procedural fairness - Rules of natural justice - Reading down the general powers of review against the provisions of the enabling Act

Legislation:

Construction Contracts Act 2004 (WA), s 26(2), s 26(2)(c), s 30, s 31, s 32, s 32(1)(b), s 32(3)(a), s 46

State Administrative Tribunal Act 2004 (WA), s 9, s 9(a), s 13, s 17, s 18, s 27, s 27(1), s 27(2), s 29, s 32, s 32(1), s 32(7)(a)

Result:

Application for interim relief refused

Additional material may be submitted for purposes of review

Summary of Tribunal's decision:

This dispute concerns a preliminary issue as to whether the Tribunal should, on review of a decision of an adjudicator under the Construction Contracts Act 2004 (WA), allow additional material to be filed. The decision under review concerned the date upon which the payment dispute was declared.

The applicant said that additional material should be allowed, because the Tribunal has the discretion, in a de novo review, to allow material that was not before the adjudicator, to be taken into account. The applicant said the discretion should be exercised in its favour, because the applicant could not have reasonably foreseen that the respondent would contend that the payment dispute arose on 10 December 2013. The applicant said no payment dispute was declared at the meeting of 10 December 2013 and therefore it could not have anticipated the evidence of the respondent. It now wishes to rebut the evidence.

The respondent said that additional material should not be allowed because the special nature of the Construction Contracts Act 2004 (WA) means that the general discretion of the Tribunal to allow additional material should be read down to the extent that: (a) no new material is allowed at all upon review; or (b) if additional material is allowed, it should be limited to exceptional cases. The respondent says that the applicant should have anticipated that 10 December 2013 may be nominated as the date upon which the payment dispute was declared and should have provided its version of the meeting to the adjudicator when it lodged the application for adjudication.

The Tribunal considered the material that was before the adjudicator and found that the Tribunal cannot on the balance of probabilities find that the payment dispute arose on 10 December 2013. The Tribunal acknowledged the unique nature of dispute resolution pursuant to the Construction Contracts Act 2004 (WA), but found that in this instance, allowance should be made for additional material to be filed to enable the Tribunal to properly determine the question before it.

[2014] WASAT 59

Category: B

Representation:

Counsel:

Applicant : In person

Respondent : Mr G C Steinepreis

Solicitors:

Applicant : N/A

Respondent : Squire Sanders

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

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

REASONS FOR DECISION OF THE TRIBUNAL :

Introduction

1 The applicant commenced a proceeding on 23 January 2014 before the adjudicator, pursuant to the Construction Contracts Act 2004 (WA) (CC Act), for certain progress payments to be made. The respondent contended, in its response dated 7 February 2014, that the application was brought out of time, since more than 28 days had lapsed since the payment dispute arose. The adjudicator dismissed the claim for reason that it was brought out of time and found that the payment dispute arose on 10 December 2013 and not on 1 January 2014, or 21 January 2014, as suggested by the applicant and handed down its decision on 14 February 2014. The adjudicator did not consider the merit of the payment dispute, since it was found that the application was out of time, and therefore not within jurisdiction of the adjudicator.

2 The applicant now seeks a review of the adjudicator's decision to enable it to adduce additional material to show that the payment dispute did not arise on 10 December 2013. The respondent opposes the application and says that additional evidence may not be considered at all during the review process.

Issues

3 The issue that arises in this proceeding is:

Can the Tribunal, upon a review, take into account evidence, material or information that was not before the adjudicator, when the decision the subject of the review was made?

Statutory framework

4 The review of an adjudication takes place according to the relevant parts of the State Administrative Tribunal Act 2004 (WA) (SAT Act) and the enabling Act, the CC Act.

5 Section 13 of the SAT Act provides:

13. Sources of jurisdiction

(1) A provision of an enabling Act that enables an application to be made to the Tribunal gives the Tribunal jurisdiction to deal with the matter concerned.

(2) In addition to the jurisdiction that an enabling Act gives to deal with a matter, the Tribunal has any jurisdiction that this Act gives in relation to that matter.

6 Section 17 of the SAT Act provides:

17. What comes within review jurisdiction

(1) If the matter that an enabling Act gives the Tribunal jurisdiction to deal with is a matter that expressly or necessarily involves a review of a decision, the matter comes within the Tribunal's review jurisdiction.

7 Section 18 of the SAT Act provides:

18. Exercising review jurisdiction

(1) In exercising its review jurisdiction the Tribunal is to deal with a matter in accordance with this Act and the enabling Act.

(2) The enabling Act may modify the operation of this Act in relation to a matter that comes within the Tribunal's review jurisdiction.

8 Section 27 of the SAT Act provides:

27. Nature of review proceedings

(1) The review of a reviewable decision is to be by way of a hearing de novo, and it is not confined to matters that were before the decision-maker but may involve the consideration of new material whether or not it existed at the time the decision was made.

(2) The purpose of the review is to produce the correct and preferable decision at the time of the decision upon the review.

(3) The reasons for decision provided by the decision-maker, or any grounds for review set out in the application, do not limit the Tribunal in conducting a proceeding for the review of a decision.

9 Section 29 of the SAT Act provides:

29. Tribunal's powers in review jurisdiction

(1) The Tribunal has, when dealing with a matter in the exercise of its review jurisdiction, functions and discretions corresponding to those exercisable by the decision-maker in making the reviewable decision.

(2) Subsection (1) does not limit the powers given by this Act or the enabling Act to the Tribunal.

(3) The Tribunal may -

(a) affirm the decision that is being reviewed; or

(b) vary the decision that is being reviewed; or

(i) substitute its own decision; or

(ii) send the matter back to the decision-maker for reconsideration in accordance with any directions or recommendations that the Tribunal considers appropriate, and, in any case, may make any order the Tribunal considers appropriate.

(4) The fact that a decision is made on reconsideration as required under subsection (3)(c)(ii), does not prevent the decision from being open to review by the Tribunal.

(5) The decision-maker's decision as affirmed or varied by the Tribunal or a decision that the Tribunal substitutes for the decision-maker's decision -

(a) is to be regarded as, and given effect as, a decision of the decision-maker; and

(b) unless the enabling Act states otherwise or the Tribunal orders otherwise, is to be regarded as having effect, or having had effect, from the time when the decision reviewed would have, or would have had, effect.

10 Section 32 of the SAT Act provides:

32. Practice and procedure, generally

(1) The Tribunal is bound by the rules of natural justice except to the extent that this Act or the enabling Act authorises, whether expressly or by implication, a departure from those rules.

(2) The Evidence Act 1906 does not apply to the Tribunal's proceedings and the Tribunal -

(a) is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that it adopts those rules, practices or procedures or the regulations or rules make them apply; and

(b) is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.

(3) Without limiting subsection (2), the Tribunal may admit into evidence the contents of any document despite non-compliance with any time limit or other requirement specified in the rules in relation to that document or service of it.

11 The CC Act provides, relevantly as follows, about the review of a decision of an adjudicator:

12 Section 46 of the CC Act provides:

46. Review, limited right of

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

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

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

13 Section 30 of the CC Act provides:

30. Object of the adjudication process

The object of an adjudication of a payment dispute is to determine the dispute fairly and as quickly, informally and inexpensively as possible.

14 Section 31 of the CC Act provides:

31. adjudicator's functions

(1) In this section —

prescribed time means —

(a) if the appointed adjudicator is served with a response under section 27(1) - 14 days after the date of the service of the response;

(b) if the appointed adjudicator is not served with a response under section 27(1) - 14 days after the last date on which a response is required to be served under section 27(1).

(2) An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a) -

(a) dismiss the application without making a determination of its merits if -

(i) the contract concerned is not a construction contract;

(ii) the application has not been prepared and served in accordance with section 26;

(iii) an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or

(iv) satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;

(b) otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine -

(i) the amount to be paid or returned and any interest payable on it under section 33; and

(ii) the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.

(3) If an application is not dismissed or determined under subsection (2) within the prescribed time, or any extension of it made under section 32(3)(a), the application is to be taken to have been dismissed when the time has elapsed.

15 Section 32 of the CC Act provides:

32. Adjudication procedure

(1) For the purposes of making a determination, an appointed adjudicator -

(a) must act informally and if possible make the determination on the basis of -

(i) the application and its attachments; and

(ii) if a response has been prepared and served in accordance with section 27, the response and its attachments;

and

(b) is not bound by the rules of evidence and may inform himself or herself in any way he or she thinks fit.

(2) In order to obtain sufficient information to make a determination, an appointed adjudicator may

(a) request a party to make a, or a further, written submission or to provide infor mation or documentation, and may set a deadline for doing so;

(b) request the parties to attend a conference with the adjudicator;

(i) inspect any work or thing to which the payment dispute relates, provided the occupier of any place concerned consents to the entry and inspection;

(ii) arrange for any thing to which the payment dispute relates to be tested, provided the owner of the thing consents to the testing;

(iii) engage an expert to investigate and report on any matter relevant to the payment dispute.

(3) An appointed adjudicator may -

(a) with the consent of the parties, extend the time prescribed by section 31(2) for making a determination;

(b) with the consent of the parties, adjudicate simultaneously 2 or more payment disputes between the parties;

(c) with the consent of all the parties concerned, adjudicate the payment dispute simultaneously with another payment dispute.

(4) If an appointed adjudicator adjudicates simultaneously 2 or more payment disputes, the adjudicator may, in adjudicating one, take into account information the adjudicator receives in relation to the other, and vice versa.

(5) An adjudicator's power to make a determination is not affected by the failure of either or both of the parties to make a submission or provide information within time or to comply with the adjudicator's request to attend a conference with the adjudicator.

(6) To the extent that the practice and procedure in relation to adjudications is not regulated by this Part or the regulations, an appointed adjudicator may determine his or her own procedure.

Case management

16 The application for review was lodged with the Tribunal on 7 March 2014. At the first directions hearing, which took place on 19 March 2014, the Tribunal made programming orders for submissions to be made. The respondent foreshadowed during the directions hearing that a preliminary issue may arise, namely, whether the Tribunal may, as part of the review, take into account material (including evidence and information) that was not before the adjudicator. The Tribunal indicated to the respondent that, if such a preliminary point were taken, it would be dealt with, prior to the review proceeding.

17 The respondent wrote to the Tribunal on 9 May 2014 saying that, it wished to raise the preliminary issue, since it was of the view, that no additional material could be taken into account by the Tribunal during the review. The respondent said that the Tribunal was restricted to the material that was before the adjudicator when it (the Tribunal) conducts the review. The Tribunal invited the applicant to respond and it did so in written submissions dated 20 May 2014. The applicant was of the view that additional material could be considered by the Tribunal, since the review was de novo and the circumstances of the case necessitated additional material to be considered.

18 The preliminary issue was heard on 21 May 2014.

19 The Tribunal emphasised, when the hearing commenced, that the purpose of the hearing was to consider the evidence that was before the adjudicator and whether the Tribunal, as de novo decision-maker, should allow new material to be submitted pursuant to s 27(1) of the SAT Act, taking into account the unique nature of dispute resolution under the CC Act.

20 The Tribunal therefore did not consider any new material that had already been filed, but focused entirely on the material that was before the adjudicator to establish whether the Tribunal could, on the basis of that material, make a determination on the balance of probabilities about the date on which the payment dispute arose.

Contentions

21 Both parties made written and oral submissions. The Tribunal took all of those submissions into account in coming to its decision.

22 The submissions of the respondent can be summarised as follows:

1) Section 27 of the SAT Act does not allow for additional material to be adduced during the review process, or, if additional material is allowed, it should only be in exceptional circumstances and the circumstances in this matter are not exceptional.

2) The review under the CC Act is not to be compared with general review functions of the Tribunal where new material is allowed as a matter of course. This is because the CC Act sets up a very unique regime that seeks to be informal, inexpensive and quick. Delays brought about by reviews and submission of additional material therefore go against the letter and spirit of the CC Act. The Tribunal could 'open the floodgates' and frustrate the system set of by the CC Act by allowing a disgruntled party additional time to submit more material during review.

3) Section 26(2) CC Act requires an applicant to set out all relevant evidence, material and information in an application for adjudication. An applicant cannot, after it has been unsuccessful, seek to have new material admitted during the review process.

4) There is no right of reply to an applicant during the adjudication process, and even if the adjudicator invited additional submissions, the 14 days within which a decision is to be handed down by the adjudicator continues to run, unless the parties consent to an extension of time.

5) The scope of any review must be determined by reference to the CC Act and the meaning of a hearing 'de novo' should be read down so as not to allow any additional material to be adduced other than submissions from the parties.

6) Even if additional material, may, as a matter of principle be adduced, the discretion of the Tribunal should not be exercised in favour of such additional material, unless there are exceptional circumstances. In this matter, there are no exceptional circumstances, since the applicant either knew, or should have foreseen, that 10 December 2013 may be found as the date upon which the payment dispute arose.

23 The submissions of the applicant can be summarised as follows:

1) Section 27 of the SAT Act bestows a discretion on the Tribunal to allow additional material to be adduced during the review process, and even if the unique nature of the CC Act process is considered, the circumstances in this matter justify allowing such additional material so as to determine the date upon which the payment dispute arose.

2) The meeting that took place on 10 December 2013 discussed the invoices and ways to prevent a potential disagreement from escalating, but at no stage did the respondent refuse payment or declare a payment dispute at the meeting.

3) Although s 26(2) of the CC Act requires an applicant to set out all relevant information in an application for adjudication, in this proceeding, the applicant could not have anticipated that the adjudicator would make a finding about what happened on 10 December 2013, without the applicant being aware that the respondent was alleging that the payment dispute arose on that day. There was no indication to the applicant, that 10 December 2013 might be nominated by the respondent, as the date upon which the payment dispute arose.

4) There is no right of reply to an applicant, but the adjudicator nevertheless has the discretion to invite a reply and, if necessary, seek an extension of time. In this case the adjudicator should have invited the applicant to reply, since there was no fair contest of evidence about what was said at the meeting of 10 December 2013.

5) Although the scope of the review is influenced by the CC Act, the review process cannot be read down so that, in effect, the Tribunal finds that as a matter of principle, no new evidence may ever be admitted in a review proceeding under the CC Act - such a predetermined decision would not constitute a proper exercise of discretion.

6) The adjudicator had insufficient evidence before it to make a determination that the payment dispute arose on 10 December 2013 and the Tribunal must allow additional evidence so as to enable the respondent to show what the content of the meeting of 10 December 2013 was and for the Tribunal to then determine on which date the payment dispute arose.

Consideration

24 The Tribunal will commence by setting out the general position of a review pursuant to the CC Act; followed by consideration of the material that were before the adjudicator; and finally consider whether additional material should be allowed as part of this review process.

Meaning of 'de novo'

25 The interaction between the general review powers of the Tribunal pursuant to s 27 of the SAT Act and the unique nature of the CC Act has been the subject of several decisions of the Tribunal.

26 Section 27 of the SAT Act sets out the review powers of the Tribunal and, most importantly, grants the discretion to the Tribunal as to whether new material should be allowed for purposes of the review. In no circumstance, including pursuant to the CC Act, is the Tribunal obligated to allow additional material to be adduced during a review process. An aggrieved party therefore does not have the right to adduce new material during a review process. The Tribunal has the discretion whether new material should be allowed and one factor that may influence the way in which the Tribunal exercises its discretion, is by taking into account the provisions of the enabling Act.

27 The concept 'de novo' is not a term of art with a consistent meaning in every possible situation. In general, 'de novo' refers to a fresh consideration of a matter, whereby the reviewing authority is placed in the shoes of the original decision-maker. A review of a decision is therefore distinguished from an appeal of a decision. Hence, pursuant to a review, the decision of the reviewing authority becomes the decision of the original decision-maker. Generally speaking, the reviewing authority is not necessarily limited to the material that was before the original decision-maker when it made its decision, but the reviewing decision-maker may take into account additional material (including evidence and information). This is because the reviewing authority is called upon to make the 'correct and preferable' decision 'at the time' of the review (s 27(2) of the SAT Act).

28 The meaning of 'de novo' must be ascertained within the context of the CC Act, pursuant to which the review occurs. Although the SAT Act establishes the basis for the Tribunal to undertake a review, any limitations imposed by an enabling Act on the generality of a review, may limit the scope of review or may assist the Tribunal to determine whether additional material should be admitted. It must therefore be emphasised that, unless the CC Act removes the discretion of the Tribunal to determine whether new material may be submitted, the Tribunal must exercise its discretion properly on a case by case basis by taking into account all relevant considerations to determine whether new material should be allowed in the review process.

Meaning of 'de novo' within context of the CC Act

29 The respondent says the CC Act is so unique, that the discretion of the Tribunal to allow additional material into the review process is, in effect, entirely removed. The respondent says that the core message arising from the decisions of the Tribunal, particularly in the matter of Marine and Civil Bauer Joint Venture and Leighton Kumagai Joint Venture [2005] WASAT 269 ( Marine ), is that the discretion of the Tribunal to allow additional material to be considered at review, should be read down to the extent that, in effect, no new material may ever be considered. This is, according to the respondent, due to the special nature of the adjudication process under the CC Act and the fact that final litigation may take place at a later stage, when a project is complete, so as to remove any remaining disputes.

30 The applicant says that the legal situation is more nuanced than made out by the respondent. The applicant says that there has been contrasting decisions emanating from the Tribunal as to whether the review proceedings under the CC Act are indeed 'de novo'; and if so, whether or not new evidence may be allowed, and if it is allowed, under what circumstances. The applicant says that the discretion of the Tribunal to allow additional material into the review process cannot be so diluted by the CC Act, that the discretion is entirely removed.

31 The Tribunal agrees with Senior Member Raymond's observation in Marine , that the nature of the CC Act requires that the general review powers set out in s 27 of the SAT Act, should be read down so as to give effect to the CC Act, as the enabling Act, pursuant to which the dispute is determined. This is because of the unique nature of the CC Act and the fact that an adjudication, pursuant to the CC Act, is not necessarily the final word in a dispute. Any remaining issues can be litigated at a later stage. Senior Member Raymond said the following about the review process under the CC Act:

66 The adjudication process is clearly designed to be a rapid process which determines, if necessary, on an interim basis, whether the contractor is entitled to a disputed payment. As stated in the second reading speech, to which recourse may be had pursuant to s 19 of the Interpretation Act 1984 (WA), its primary aim is to keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes. The object of the adjudication process is expressly stated in s 30 of the CC Act, that is, to determine the dispute fairly and as quickly, informally and inexpensively as possible.

67 For the purposes of making a determination, an adjudicator must act informally and, if possible, make the determination on the basis of the application and its attachments, and, if a response has been prepared and served, the response and its attachments. Only if it is not possible to make a determination on those documents may the adjudicator require further information (s 32). (Tribunal emphasis)

70 Section 27 provides that the hearing may involve the consideration of new material, whether or not it existed at the time the decision was made. In my view, no new material should be permitted because, if the decision under review is reversed, and the matter referred back to the adjudicator, I consider that the adjudicator must remain bound to decide the matter on the material which was originally before the adjudicator in accordance with s 32 of the CC Act.

71 Accordingly, to the extent that any of the material provided to me was not before the adjudicator, I have had no regard to it. Of course, that does not include submissions on the law based on the material which was before the adjudicator.

32 The Tribunal therefore agrees with the comment by Senior Member Raymond, that the discretion referred to in a s 27 review power, must be exercised within the framework of the CC Act.

33 This brings me to the unique nature of the CC Act. It is not in dispute that the aim of adjudication under the CC Act, is to provide a speedy resolution mechanism, with little cost, little technicality and high flexibility while a construction project is underway. This is evident from the parliamentary debates that gave rise to the CC Act; the informal and flexible provisions of the CC Act; the short timeframe within which disputes must be dealt with; the relative limited nature of appeals and reviews; the use of non-legally trained persons to conduct an adjudication; the rules of evidence do not apply; no quantum limit exists for determinations; and the assumption is, that any unresolved disputes, can be dealt with at the conclusion of a project. Although it is generally said that the CC Act is designed to ensure that the cash flows, this clearly does not mean that there is a bias in favour of the contractor. It merely emphasises the importance of a speedy resolution of disputes to provide certainty while the project is under way. Perhaps a more appropriate expression would be that the 'show must go on'.

34 An important element of the CC Act, is that it is not envisaged, that for purposes of adjudication, formal hearings would occur in a manner that is usually undertaken by courts and tribunals. It is presumed, although with some exception, that an adjudication is made on the papers before the adjudicator. Hence, the obligation arising from s 26(2)(c) of the CC Act, in which it is emphasised that an application must contain, 'all the information, documentation and submissions on which the party making it relies in the adjudication'. Although the adjudicator may invite additional submissions (s 32(1)(b) CC Act), there is no obligation on the adjudicator to invite additional material; seek clarification; or afford parties an opportunity to comment on each other's submissions. Most importantly, the applicant in a proceeding does not have a right to sight the submissions of the respondent, or to reply to those submissions.

35 The adjudicator is also under severe time pressure, since the time within which an adjudication must be handed down (14 days), continues to run, even if additional evidence is sought from the parties, unless, of course, the parties consent to an extension of time (s 32(3)(a) of the CC Act).

36 Although this very quick, streamlined and strict process seems to rebel against the normal procedures of litigation, the adjudication process must be assessed within the context of the CC Act, where the arbitrator does not provide final decisions over disputes, as well as the robust nature of the adjudication regime under the CC Act.

Evidence before the adjudicator

37 The Tribunal considered, with the assistance of the parties, the relevant material that was before the adjudicator in regard to the finding of the adjudicator that the payment dispute arose on 10 December 2013. The Tribunal invited the parties to refer the Tribunal to all the relevant documents that relate to the payment dispute and, in particular, to the contention that the payment dispute was declared on 10 December 2013. The Tribunal emphasised, that as the decision-maker, it first wanted to consider the material that was before the adjudicator, to establish whether that material is adequate for a finding on the balance of probabilities, about the date upon which the payment dispute occurred. The Tribunal said that such consideration could assist it in determining the issue the subject of the proceeding namely whether additional material should be allowed for purposes of determining the date of the payment dispute.

38 The Tribunal finds that the evidence before the adjudicator was not adequate for the Tribunal to make a finding on the balance of probabilities that the payment dispute arose on 10 December 2013.

39 The reasons for this finding are as follows:

1) The meeting of 10 December 2013 was convened by the parties to discuss the ongoing issues about invoices and payment. The meeting followed the Invoices for Variations dated 3 December 2013. Prior to the issuing of the Invoices for Variations there were already some disagreement between the parties about work done and payment for work and variations. There was, however, nothing in the arrangements leading up to the meeting of 10 December 2013 that gave the meeting any special significance as a 'make or break' meeting. When all the evidence before the adjudicator is considered, the meeting of 10 December 2013 was part of ongoing efforts by the parties to resolve a disagreement. Following the meeting of 10 December 2013, there were, in fact, further correspondence and meetings between the parties, of which none make any reference to a payment dispute having been declared on 10 December 2013. The Tribunal therefore agrees with the applicant that, when all material before the adjudicator is considered, that the 10 December 2013 meeting should be seen as just another interaction between the parties to resolve disagreements to prevent a payment dispute from being declared.

2) There is insufficient evidence to make a finding that a payment dispute was declared at the meeting of 10 December 2013. The statutory declaration of Mr Hardeep Singh Sandu, that he said words at the 10 December 2013 meeting to the effect, 'we are not going to entertain payment of your claim', is not consistent with the post-it note he kept of the meeting or the events following the meeting. The only note available to the adjudicator had the following written on it: 'No output to convey forward the discussion'. These words cannot reasonably be taken to construe only one outcome, namely a payment rejection. Even if the words are accepted to indicate a disagreement, or even if the words reflect Mr Sandu’s state of mind, the note is insufficient to corroborate the statement of Mr Sandu that an unequivocal rejection of payment was made by him. The relevant portions of Mr Sandu's statement in regard to the 10 December 2013 meeting are from paragraphs 48 to 53 of the statutory declaration. It would seem as if paragraphs 48 to 53(j) are indicative of a strong disagreement between the parties about work done and payments demanded. None of the other representatives of the respondent who attended the meeting, gave evidence about whether a payment dispute had been declared by Mr Sandhu. There is, when all the information before the adjudicator is considered, insufficient evidence to support a finding that Mr Sandhu unequivocally declared a payment dispute at the meeting.

3) The events following the meeting of 10 December 2013 give additional credibility to the applicant's version that no payment dispute was declared on 10 December 2013. The applicant wrote to the respondent on 16 December 2013 and referred to the meeting of 10 December 2013. The applicant states in the letter as follows: 'We understood from the meeting that the respondent would be making an assessment of these variations by 13 December 2013. We have yet to receive that assessment apart from Variation 1.65 where you had earlier issued a not to exceed instruction for $200,000'. There is nothing in this letter to suggest that a payment dispute had been declared on 10 December 2013. In fact, the letter goes on to put the respondent on notice that unless a decision is made by 18 December 2013, the applicant will assume that payment is disputed. There is no reason for the applicant to put the respondent on notice that a payment dispute would be declared, if a dispute had already been declared by the respondent on 10 December 2013. Most notably, is that the respondent, and particularly Mr Sandu, did not reply to the letter of 16 December 2013. Mr Sandu did not reply to the letter by reminding the applicant that the respondent had already refused payment.

4) The statutory declarations by Mr C J Swanepoel and Mr M C John about the content of discussions of the meeting that took place on 18 December 2013, give additional credibility to the contention of the applicant that no payment dispute was declared on 10 December 2013. Mr Swanepoel, commercial manager of the respondent, makes no mention of a payment dispute having been declared on 10 December 2013. In fact, he says that there was agreement at the meeting of 18 December 2013 for discussions to continue. Mr John, business unit manager substations of the respondent, also makes no mention of a payment dispute that purportedly arose on 10 December 2013. In fact, he also says that at the meeting of 18 December 2013, there was a disagreement about the 'range of amounts' claimed by the applicant, but that further discussions should take place between the parties.

5) To add to the strength of the applicant's contention that discussions had been ongoing after the meeting of 10 December 2013, Mr Sandhu wrote a letter on 21 January 2014 to the applicant in which he replied to Variation 1.65. No mention is made that the claim was purportedly rejected on 10 December 2013.

6) The Tribunal notes that, although the applicant said in its submission to the adjudicator that the cut-out variation was not discussed on 10 December 2013, the applicant nevertheless says, in its letter of 16 December 2013, that the claim had been discussed. The respondent says this contradiction so affects the credibility of the applicant that it is fatal to the application. The Tribunal disagrees. Although there is, on that point, some inconsistency, the Tribunal must consider all the evidence that was before the adjudicator and then a clear and persistent trend arises namely that 10 December 2013 was an important meeting to discuss payment, but that there is insufficient evidence before the adjudicator to conclude that a payment dispute was declared at the meeting.

7) The Tribunal does not agree with the submission of the respondent and the reasons of the adjudicator that the applicant should have foreseen that the respondent may contend that a payment dispute was declared on 10 December 2013. There is no cogent base to conclude that it was foreseeable, or predictable, that Mr Sandhu would contend in the adjudication process, that he declared a payment dispute at the 10 December 2013 meeting. It could therefore not have been reasonably expected of the applicant to include in their application for adjudication, detailed affidavits about the content of a meeting that they did not know might be regarded by the respondent, as being a payment dispute meeting. The consequences of the logic of the argument of the respondent would be impractical to implement, since it would require from the applicant, to anticipate every possible contention, based on fact or fiction, that could be made by the respondent, and develop a reply to it.

40 The Tribunal is therefore not able, based on the material that was before the adjudicator, to make a finding on the balance of probabilities that a payment dispute was declared on 10 December 2014.

Should new material be allowed?

41 This brings the Tribunal to the question whether new material should be allowed in the review process to enable the Tribunal to properly discharge its functions as decision-maker.

42 The Tribunal is of the view that its discretion should be exercised in favour of additional material being submitted, so as to decide the date of the payment dispute, after all relevant material have been taken into account.

43 The reasons for this decision are as follows:

44 Section 27 of the SAT Act bestows the discretion on the Tribunal to allow additional material upon review, whether that material was available at the time of the adjudication, or not. As the de novo decision-maker, the Tribunal has concluded that, the evidence that had been before the adjudicator, is not adequate for the Tribunal to make a decision, on the balance of probabilities, about the date upon which the payment dispute arose. Although the concept 'de novo' must be read down within the context of the CC Act, the practical effect of 'de novo' and the discretion granted to the Tribunal, cannot, in this matter, be reduced to a point where no practical content is given to the discretion of the Tribunal in a review proceeding.

45 The very purpose of a review proceeding is to enable the decision of the original adjudicator to be reconsidered within the objectives of the enabling Act. If the legislature had intended that the review function should be totally removed, or strictly limited to exactly the same material that was before the original decision-maker, it could have expressed that intention by way of the CC Act. Now, however, the reviewing authority must exercise its discretion as to whether additional material is allowed. The question whether additional material is allowed obviously depends on each case, and given the unique nature of the CC Act, it may be rare to allow additional evidence to be allowed during the review process.

46 Although the adjudication proceeding is intended to be quick, informal, inexpensive and flexible (s 30 of the CC Act), the Tribunal is placed in the shoes of the adjudicator and must take into account all the evidence that was before the adjudicator and may take into account additional material, if the material that was before the adjudicator were inadequate for a finding to be made about the date of the payment dispute. The discretion to invite additional material should be exercised with caution in light of the unique nature of the CC Act. In this proceeding, it is proper for additional material to be allowed.

47 The Tribunal carefully considered all the material that was before the adjudicator and, even taking into account that the adjudicator may not be legally trained and that there is a short timeframe to hand down an adjudication, the Tribunal cannot see how the adjudicator could have reasonably come to his conclusion on a balance of probabilities about the date of the payment dispute, without a fair contest of evidence.

48 Although the rules of evidence do not apply to the adjudicator or to the Tribunal, the adjudicator and Tribunal are bound by the rules of natural justice and procedural fairness. The way in which practical effect is given by the adjudicator and Tribunal to these principles, is influenced by the statutory regime of the CA Act, pursuant to which, the dispute is determined.

49 Although the adjudicator is not obliged to invite additional submissions, this Tribunal, since it is placed in the shoes of the adjudicator, would regard it as essential pursuant to the rules of natural justice and procedural fairness that the strong assertions made by the respondent in regard to the meeting of 10 December 2013 are put to the applicant to respond. Without doing so, it would give the respondent a demonstrably unfair advantage, where it could say virtually anything, about any meeting or incident, real or imagined, without being challenged.

50 The Tribunal should, in the least, be satisfied that the issues to be determined are adequately contested by the parties, or that they had an opportunity to contest an issue. The Tribunal should determine a matter fairly and according to the substantial merit of the case (s 9 of the SAT Act). This means, in the most elementary terms, that both sides must be able to express their view as to what happened at the meeting of 10 December 2013. It seems from the evidence before the Tribunal that the applicant was potentially blindsided, when a version of the meeting of 10 December 2013 was presented by the respondent to the adjudicator that was, according to the applicant, entirely unfounded and unsupported by fact. The Tribunal, upon considering the evidence that was before the adjudicator, concludes that a finding cannot be made on the balance of probabilities that a payment dispute was declared on 10 December 2013.

51 The Tribunal does not accept the submission of the respondent that the applicant is attempting to change its case by way of the review. The reason why the Tribunal is allowing additional material, is that the respondent contends that the payment dispute arose on 10 December 2013. The respondent does so by way of a statutory declaration by Mr Sandhu. The applicant could not reasonably have foreseen that the meeting of 10 December 2013 would be identified as the event when the payment dispute was declared. It is therefore proper to allow the matter to be ventilated. Nothing suggests that the applicant is changing its case.

52 The acknowledgement of the Tribunal that the CC Act establishes a unique regime for the adjudication of disputes, does not remove the other statutory principles upon which the Tribunal operates, namely, the rules of natural justice (s 32(1) of the SAT Act; procedural fairness; determining matters according to the substantial merits of the case (s 9(a) of the SAT Act); and the obligation to ensure that all relevant material is disclosed so as to enable the Tribunal to determine all of the relevant facts in a proceeding (s 32(7)(a) of the SAT Act).

53 The Tribunal does not agree with the respondent, that by allowing additional evidence, the 'floodgates will open' and matters that have been adjudicated will be re-litigated in the Tribunal. The Tribunal explained in its reasons that the discretion to allow additional material should be exercised with all information in mind. This is a special circumstance where it is indeed justified.

54 The applicant should therefore be allowed to reply to the statutory declaration of Mr Sandhu and, if necessary, to submit additional information to which the respondent will be given an opportunity to reply. Then the Tribunal will be able to properly discharge its review function.

Finding

55 The Tribunal finds that additional material may be submitted so as to enable the Tribunal to determine on a balance of probabilities the date upon which the payment dispute was declared.

Orders

For the reasons stated above, the Tribunal makes the following orders:

1. The parties may adduce additional material in regard to the date upon which the payment dispute arose.

2. The applicant must by not later than 16 June 2014, file and serve any additional material, including any witness statements, upon which it wishes to rely in regard to the date upon which the payment dispute arose.

3. The respondent must by not later than 30 June 2014, file and serve any additional material, including any witness statements, upon which it wishes to rely in regard to the date upon which the payment dispute arose.

4. The matter is set down for a hearing to take place on 29 July 2014.

I certify that this and the preceding [55] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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DR B DE VILLIERS, MEMBER