SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: Denham Constructions Project Company 810 Pty Ltd v Smithies & Anor; Denham Constructions Project Company 810 Pty Ltd v Risgalla & Anor

Citation: [2014] ACTSC 169

Hearing Date(s): 1 July 2014

Decision Date: 11 July 2014

Before: Mossop M

Decision: Applications dismissed.

See [58] for further orders in relation to costs.

Category: Interlocutory application

Catchwords: BUILDING AND CONSTRUCTION – progress payments – filing arbitration certificate as judgment debt – security of costs – judicial review – whether proceedings should be stayed or dismissed for abuse of process or lack of utility

Legislation Cited: Building and Construction Industry (Security of Payment) Act 2009 (ACT) ss 25-27, 38, 43

Building and Construction Industry Security of Payment Act 1999 (NSW) s 25 Supreme Court Act 1933 (ACT) s 3

Cases Cited: Birdon v Houben Marine (2011) 197 FCR 25

Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245

Brodyn v Davenport (2004) 61 NSWLR 421

Chase Oyster Bar v Hamo Industries (2010) 78 NSWLR 393

Doyle v Hall Chadwick Pty Ltd [2007] NSWCA 159

Eastman v Higgins [2007] ACTSC 29

Fargat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 395

Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51

King v Higgins [2009] ACTSC 153

New South Wales v Kable (2013) 298 ALR 144

Rogers v The Queen (1994) 181 CLR 251

Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320

Satchithanantham v National Australia Bank Ltd [2010 FCAFC 47

South Australia v Lampard-Trevorrow [2008] SASC 370

Surfabear Pty Ltd v GJ Drainage & Concrete Construction Pty Ltd [2010] 2 Qd R 366

Williams v Spautz (1992) 174 CLR 509

Tombleson v Dancorell Constructions [2007] NSWSC 1169

Texts Cited: Spencer Bower and Handley , Res Judicata (LexisNexis Butterworths, 4th ed, 2009)

Parties: SC 217 of 2014:

Denham Constructions Project Company 810 Pty Ltd (Plaintiff)

Ted Smithies (First Defendant)

Stowe Australia Pty Ltd (Second Defendant) SC 218 of 2014:

Denham Constructions Project Company 810 Pty Ltd (Plaintiff)

Rosemarie Risgalla (First Defendant)

Stowe Australia Pty Ltd (Second Defendant)

Representation: Counsel:

Mr M Condon SC & Mr G Blank (Plaintiff)

Mr S Robertson (Second Defendant)

Solicitors:

Crisp Legal (Plaintiff)

Hicksons Lawyers (Second Defendant)

File Number(s): SC 217 of 2014; SC 218 of 2014

Proceedings

1. There are two sets of proceedings currently on foot in which the plaintiff (Denham 810) seeks to quash decisions of an adjudicator under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (SOP Act). Both adjudicators, the first defendants in each proceeding, have entered submitting appearances. The second defendant and beneficiary of the adjudicator’s decision in each of the proceedings (Stowe) seeks to have the proceedings either stayed or dismissed.

2. The adjudication certificate arising out of one of the adjudication decisions has been filed as a judgment of the Court under s 27 of the SOP Act. Section 27 provides:

27 Filing of adjudication certificate as judgment debt

(1) An adjudication certificate may be filed as a judgment for a debt, and may be enforced, in any court of competent jurisdiction.

...

(4) If the respondent starts a proceeding to have the judgment set aside, the respondent—

...

(b) is required to pay into the court as security the unpaid part of the adjudicated amount pending the final decision of the proceeding.

3. Stowe contends that the proceedings challenging the adjudication decision which gave rise to the judgment should be dismissed by application of the principles of issue estoppel or, alternatively, stayed or dismissed as an abuse of process. Stowe also contends that the proceedings challenging the other adjudication decision should be stayed or dismissed on the ground that they lack utility. Stowe has filed interlocutory applications seeking these outcomes.

4. There are three issues that it is necessary to determine in order to decide the second defendant’s applications.

5. First issue: Does s 27(1) have the effect of simply permitting an adjudication certificate to be enforced as if it were a judgment of the Court, or does it also have the consequence that there is an issue estoppel that arises as to the validity of that certificate which can only be effectively avoided by an application to set aside the judgment under s 25 or as a consequence of an appeal under s 43.

6. Second issue: Does the pursuit of proceedings for prerogative relief to quash a decision of an adjudicator constitute an abuse of process in circumstances where there is no present application to set aside the judgment and where the plaintiff is proceeding in this manner so as to avoid any present requirement to pay the adjudicated amount into court pursuant to s 25(4).

7. Third issue: Should proceedings challenging an adjudication decision relating to an earlier payment be stayed in circumstances where:

(a) the adjudication certificate in relation to a later payment claim has been filed and become a judgment of the Court; and

(b) the adjudication decision included amounts the subject of an earlier adjudication decision; and

(c) the beneficiary of both adjudication decisions has indicated that it will not take any steps to enforce the adjudication decision in relation to the earlier payment claim until proceedings related to the subsequent adjudication decision have been determined.

Background

8. On 15 May 2014 two adjudication decisions were made in favour of Stowe and against Denham 810 under s 24 of the Act.

9. Denham 810 has sought judicial review of both decision in proceedings SC217 of 2014 and SC218 of 2014. The adjudication decision challenged in proceeding SC218 related to a payment claim made by Stowe in February 2014 and decided that Stowe was entitled to be paid $362,925.41 (including GST) (February Payment Claim Decision).

10. The adjudication decision challenged in proceedings SC217 related to a payment claim made by Stowe in March 2014 and decided that Stowe was entitled to be paid $455,713 (including GST) (March Payment Claim Decision). The amounts the subject of the February Payment Claim Decision were included in the amounts the subject of the March Payment Claim Decision.

11. Denham 810 has not paid any amount on account of either of the adjudication decisions. It has not sought to restrain Stowe from asking for or obtaining an adjudication certificate under s 26 of the SOP Act or from filing such a certificate as a judgment for a debt under s 27.

12. On 28 May 2014, Denham 810 commenced the present proceedings. Denham 810 did not seek any interlocutory relief.

13. Adjudication certificates were issued in relation to both adjudication decisions. The certificate in relation to the March Payment Claim Decision executed on 26 May 2014 was subsequently filed and received the file number SC215 of 2014.

14. On 30 May 2014 a Deputy Registrar of the Court signed a document stating “Take notice that an Order made under section 26 of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) was registered in this matter on 28 May 2014.”

15. On 18 June 2014 a document was signed by a Deputy Registrar stating, inter alia: In these proceedings the Australian Solutions Centre Pty Ltd ordered against the judgment debtor [Denham 810] on the 15th day of May 2014 and that Order was registered in the Civil Section of the Supreme Court on the 28th day of May 2014 for $469,211.40.

16. The effect of the evidence is, therefore, that on 28 May 2014, the adjudication certificate was “filed as a judgment for a debt, and [can] be enforced, in any court of competent jurisdiction” (the s 27 Judgment).

17. On 10 June 2014 Denham 810 made an application to set aside the s 27 Judgment. This was done by way of application in proceedings SC215 of 2014. Section 27(4) of the Act is set out above and required Denham 810 to pay into court the unpaid part of the adjudicated amount pending the final decision of the proceeding. Despite this provision Denham 810 did not pay any amount into court when it applied to set aside the judgment.

18. On 13 June 2014 Senior Counsel for Denham 810 indicated that his client did not press its application to have the judgment set aside. The application in SC215 of 2014 was therefore dismissed with costs. That left on foot the two applications for prerogative relief made in SC217 and SC218 in circumstances where there was no payment into court of the amount the subject of the adjudication certificate and no other security for payment either provided or offered by Denham 810. In those circumstances Stowe contended that either by reason of the application of the principles of issue estoppel or, alternatively, because continuing the proceedings without payment into court would constitute an abuse of process, the outstanding proceedings should be dismissed or stayed.

19. Stowe also contended that, in any event, proceedings SC218 should be stayed because there was no utility in determining those proceedings in circumstances where it had no present intention to rely upon the February Payment Claim Decision. That was because it accepted that to enforce both adjudication decisions would lead to double recovery. It submitted that it will have to make a decision about whether or not to seek to enforce the adjudication decision in SC218 only when a decision is made in relation to the validity of the March Payment Claim Decision and the judgment upon which it is based. It submitted therefore that proceedings SC218 should be stayed until that point is reached.

First issue: Is Denham 810 estopped from denying the validity of the March Payment Claim Decision?

Submissions

20. Stowe contended that, for so long as the s 27 Judgment remains on foot, Denham 810 is estopped from denying that the March Payment Claim Decision is valid. It submitted that proceedings SC217 should be dismissed because Denham 810’s case in that proceeding seeks to proceed in a manner which is directly inconsistent with that estoppel.

21. The estoppel as against Denham 810 was said to arise as a consequence of the following chain of reasoning:

(a) the Supreme Court of the Australian Capital Territory is a superior court of record: Supreme Court Act 1933 (ACT) s 3;

(b) “ orders of a superior court of record are valid until set aside, even if the orders are made in excess of jurisdiction ”: New South Wales v Kable (2013) 298 ALR 144 at [32];

(c) As a consequence of (a) and (b) above, the s 27 Judgment is valid until set aside even if the adjudication certificate or adjudication decision on which it was based was void for jurisdictional error: see Brodyn v Davenport (2004) 61 NSWLR 421 at [61];

(d) “[a] judgment in favour of the plaintiff, by default or otherwise, establishes that he had a cause of action and each essential element of it”: Spencer Bower and Handley , Res Judicata (4th ed, 2009) at [8.15];

(e) an “essential element” of the s 27 Judgment was that the document filed by Stowe in this Court was a (valid) adjudication certificate for the purposes of the Act (if it wasn’t it could not have been “filed as judgment for a debt” under s 27 of the Act);

(f) as a consequence, for so long as the s 27 Judgment remains on foot, Denham 810 is estopped from denying that the adjudication certificate on which the s 27Judgment was based was a valid adjudication certificate;

(g) that being so, any assertion that the March Payment Claim Decision is invalid must inevitably fail as, if the certificate is valid (as Denham 810 is bound by an issue estoppel to accept), it necessarily follows that the March Payment Claim Decision is also valid (as a valid adjudication certificate can only be issued where a valid adjudication decision under the Act has been made and not complied with: see SOP Act s 26(1)).

22. Denham 810 submitted that a judgment entered pursuant to s 27 of the SOP Act represents a “ministerial act”, which makes an adjudication certificate enforceable as a judgment but otherwise does not alter the legal effect of the underlying decision and does not make it a judgment of the Court in the ordinary sense. As such the judgment does not have the consequences asserted by Stowe. It makes that submission based on the structure and terms of the Act itself and the nature of a judgment entered pursuant to the Act. In this regard Denham 810 points to the following matters.

(a) Section 38(2) of the SOP Act provides that nothing done under Part 4 of the Act affects any civil proceedings arising under construction contract, whether under Part 4 or otherwise except in a limited way provided for in subsection (3). Thus there could be no issue estoppel arising in relation to the substance of what is said in an adjudication certificate such as the amount owed by one party to another.

(b) The existence of s 43 of the SOP Act permits an appeal against the adjudication decision as opposed to the adjudication certificate or any judgment created by the filing of such a certificate. This means that an adjudication decision could be varied and leaves open the possibility that a varied adjudication decision might be lodged as a judgment under s 27(2)(a). This means that the Act contemplates the possibility that there may be two judgments, a prospect inconsistent with any issue estoppel arising in relation to the first such judgment.

(c) Authority indicates that prerogative relief is directed to the “adjudication decision” and not the separate and discrete judgment: see Chase Oyster Bar v Hamo Industries (2010) 78 NSWLR 393 ( Chase ) at 446[264]. The availability of such relief in relation to the adjudication decision is inconsistent with any judgment entered based on the adjudication certificate creating an issue estoppel as to the validity of the adjudication decision.

(d) The decision in Doyle v Hall Chadwick Pty Ltd [2007] NSWCA 159 ( Doyle ) provides an example of another statutory scheme in which the registration of a non-judicial decision as a court order was found not to carry with it all of the consequences of an ordinary judgment. The effect of the deemed judgment was determined by reference to the terms of the statute which created it.

(e) The explanation of the statutory scheme for registration of an adjudicator’s decision in Birdon v Houben Marine (2011) 197 FCR 25 ( Birdon ), where there was a challenge to that scheme based on its alleged incompatibility with Chapter III of the Constitution .

Consideration

23. In my view the critical issue arises at points (d)-(f) in the chain of reasoning put forward by Stowe set out above. Does s 27, in addition to permitting enforcement of the adjudication certificate as if it was a judgment of the Court, mean that such a judgment also carries with it the issue estoppel consequences that would flow from an ordinary judgment of the Court? This turns on the effect of s 27(1) in its statutory context.

24. The starting point must be the words of the section, which are set out above. The reference in s 27(1) to the adjudication certificate being “filed as a judgment for a debt” is obviously designed to give the certificate an effect that it would not otherwise have.

25. In Birdon the validity of the Building and Construction Industry Security of Payment Act 1999 (NSW Act), which is in relevantly similar terms to the SOP Act, was challenged on the basis that the procedure for recovery of progress payments set out in the Act impermissibly interfered with the judicial power of the Commonwealth. The plaintiff in that case submitted that the provision which made an adjudication certificate enforceable as a judgment was incompatible with the integrity, independence and impartiality of the Supreme Court of New South Wales and invalid because of the principle in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. In particular, the plaintiff contended that the provision which permitted the filing of adjudication certificates as judgments for debt impermissibly conscripted the courts to do the work of the legislative or executive branches of the government. The majority judges, Keane CJ and Buchanan J, found that there was no incompatibility. Rares J found that there was. Each judge made observations about the operation of s 25 of the NSW Act which are significant in assessing the consequences that flow from the filing of an adjudication certificate as a judgment for a debt. In what follows I have substituted references to the NSW Act with references to the provisions of the SOP Act as, in my view, what their Honours had to say is directly relevant to the ACT Act which is in relevantly identical terms.

26. Having set out the equivalent of s 27 of the SOP Act, Keane CJ said:

30. I pause here to note that [s 27(1)] does not deem an adjudication certificate to be a judgment of a court of competent jurisdiction for all purposes. Rather, it provides only that it may be “filed as a judgment” and is “enforceable” as if it were a judgment for a debt. It is also to be noted that [s 27(4)] does not speak to the court seized of the underlying dispute, if any, between the parties.

27. He then referred to the equivalent of s 38 of the SOP Act and said:

33. It may be noted here that the Security of Payment Act is not concerned to give effect to the rights of the parties under the construction agreement. As is apparent from the terms of s 32(2), it expressly leaves the determination of those rights to the courts. The process for which the Security of Payment Act provides does not involve a determination, even of a provisional kind, of the actual rights of the parties under their construction contract. Section 23 contemplates an “assessment” by the adjudicator, and this assessment may be enforced as if it were a judgment of a court of competent jurisdiction but only insofar as a court has not determined, or does not determine, otherwise.

28. His Honour specifically addressed the contention of the plaintiff that the regime was incompatible with the exercise of Chapter III judicial power and said:

51. The plaintiff contends that the Security of Payment Act purports, by [s 27], to conscript the courts to do the work of the legislative or executive branches of government of the State of New South Wales. That contention is not correct: as is apparent on its face, [s 27] does not require any court to undertake a non-judicial function much less a court exercising the judicial power of the Commonwealth over maritime claims.

...

53. There is nothing about the enforcement of the adjudication certificate as if it were a judgment of a court which is at odds with the fundamentals of the judicial process. The concern which informs the Kable principle is that the other branches of government should not be able to claim the authority of the judicial branch of government for their decisions by representing an executive or legislative decision as an exercise of the judicial power. Section [27] of the Security of Payment Act does not engage that concern. It is readily apparent from the terms of [ss 24-27] of the Act that the adjudication certificate which [s 25] makes enforceable as if it were a judgment of a court is not the product of the exercise of judicial power. It cannot seriously be suggested that s 25 makes the Supreme Court of New South Wales an unsuitable repository of the judicial powers of the Commonwealth. And, in any event, no exercise of the judicial power of the Commonwealth is involved in the enforcement of an adjudication certificate.

29. His Honour later described (at [62]-[63]) the right to claim progress payments as a “novel statutory right to receive a provisional payment of an adjudicated amount” and said the provisions of the Act “define the incidents of the novel right”.

30. Buchanan J, having set out the equivalent of s 25 and s 38 of the SOP Act said:

154. It will be noted that [s 27] confines the operation of an adjudication certificate as a judgment (when filed) to the unpaid portion of the adjudicated amount. [Section 38(3)] directs that in any (civil) proceedings in relation to any matter arising under a construction contract any amount paid must be allowed for and permits restitution of any such amount if appropriate. In this way the statutory scheme seems to confine its intended operation to the establishment of an administrative procedure concentrated upon the timely recovery of claimed, upheld and unpaid “progress payments”, without any payment made in response to a claim or an adjudication becoming legislatively fixed, unreviewable or irrecoverable in due course. The scheme bears all the hallmarks of an administrative arrangement for a speedy adjudication which will operate without prejudice to ultimate legal rights and, to the extent necessary, on an interim basis.

31. He referred with approval to the decision of Handley JA in Fargat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 395 at [21]-[22] and the decision of Brereton J in Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320 at [55]-[56] both of which emphasised the interim nature of the payment scheme and the fact that common law rights remained to be determined in the normal manner. His Honour therefore concluded (at [162]) that there was no interference with the institutional integrity of courts upon which the judicial power of the Commonwealth may be conferred and no basis for concluding that the exercise of judicial power by any court was affected by the procedures established by the Act.

32. Rares J found that the equivalent to s 27 and s 38(3) were invalid because they impermissibly interfered with the institutional integrity of the courts upon which the judicial power of the Commonwealth could be conferred. His Honour said (at [93]) that if a certificate is filed then the judgment created is one which attracts the appellate jurisdiction of the High Court under s 73 of the Constitution and asked what would be the subject of such an appeal given that the adjudication process itself was nonjudicial. He pointed out (at [96]) that a judgment under s 27 had to be recognised and given full faith and credit under s 118 of the Constitution . His Honour analysed the case as being similar to Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 where the registration in the Federal Court of what would otherwise have been considered a non-judicial adjudication process was found to be invalid. He drew a distinction between that situation and situations where judgments of foreign courts are registered ([125]). His Honour concluded (at [129]):

I am of opinion that the entry of an adjudication certificate as an enforceable judgment of a court arrived at by a process that was not at all judicial, with no judicial scrutiny, or even any opportunity for such scrutiny, is fundamentally inconsistent with the judicial process. It uses the status and powers of a court to clothe the adjudication certificate in a judicial guise. But, this is a chimera. It is an usurpation of the judicial authority of the court whose process is conscripted to give the appearance of a judicial determination – an enforceable judgment – to an unjudicial exercise. The “judgment” created by force of s 25(1) is not an exercise of judicial power, yet, if it were valid, ss 73 and 118 of the Constitution would clothe it in judicial raiments. No judicial process is engaged at any point prior to the entry of judgment enforceable, if s 25(1) is a valid law, throughout the Commonwealth by force of s 118 and covering cl 5 of the Constitution . For these reasons, question 2 should be answered: “Sections 25 and 32(3) are invalid because they impermissibly interfere with the institutional integrity of the courts upon which the judicial power of the Commonwealth can be conferred.

33. The distinction between the majority judgments of Keane CJ and Buchanan J and the dissenting judgment of Rares J was between how the reference in s 27(1) to “judgment” is characterised. The emphasis in Keane CJ’s reasons is upon the picking up of the enforcement mechanisms of the Court in relation to the adjudication certificate. That, combined with the expressly stated lack of interference with any rights arising under the contract was sufficient to make the process compatible with the exercise of Commonwealth judicial power by a State Supreme Court. On the other hand Rares J treated the reference to judgment as being a reference not merely to enforceability but to all of those incidents which would come from a judgment entered as a consequence of the ordinary court process. As a consequence His Honour concluded that there was an attempt to clothe the adjudicator’s certificate with all of those aspects of such a judgment and it was that which led to his conclusions as to validity in the passage quoted above.

34. It is consistent with the approach taken by the majority judges in Birdon to characterise the rights created by the SOP Act as novel statutory rights which, notwithstanding the reference to “enforced as a judgment for debt”, do not necessarily pick up all of the incidents of an ordinary court judgment that has been entered.

35. Such an approach is consistent with the decision of the New South Wales Court of Appeal in Doyle . In that case the provisions of the Legal Profession Act 1987 (NSW) permitted the certificate of a cost assessor to be filed in a court of competent jurisdiction and that it was then “taken to be a judgment of that court for the amount of unpaid costs”. A certificate had been filed and the client then sought to appeal the underlying costs assessment pursuant to a statutory provision which permitted an appeal “as to a matter of law”. The lawyer submitted that the determination of the cost assessor had, upon filing of the certificate of the costs assessor, merged into a judgment so that the underlying basis of the appeal had disappeared and the judgment itself was conclusive and beyond recall. This submission obviously involved giving to the judgment which the statute said existed upon the filing of the costs of certificate the same effects as would be given to a judgment entered in accordance with the usual court process. That was an argument which was unsuccessful both before the primary judge and upon appeal.

36. In the Court of Appeal, Handley JA approached the matter as an exercise in discerning the legislative intention. His Honour pointed to a number of factors which indicated that it was not the legislative intention to preclude any appeal by reason of the fact that the costs certificate was taken to be a judgment of the court. His Honour said:

48 The 1987 Act discloses a plain legislative intention that there be an appeal to the Supreme Court in a Division against decisions of costs assessors; and in my opinion it was plainly not the intention of the legislature either that the possibility of such an appeal should be wholly lost if a judgment was obtained under s 208J, because the certificate then merges into the judgment and can no longer be set aside; or that there would have to be also an application for leave to appeal to the Court of Appeal pursuant to s 101 of the Supreme Court Act.

49 Accordingly, in my opinion the clear legislative intention is that an appeal to the Supreme Court should be able to proceed after a judgment has been obtained under s 208J. Further, in my opinion, there is no difficulty in giving effect to this legislative intention. It is well recognised that there are judgments that are not based on any decision of the Court of which they are taken to be judgments, but have some other basis; and such judgments may be set aside or varied if that basis is defeated or varied.

50 One example is judgments entered by consent. They are “mere creatures” of the agreement, and may be set aside, without an appeal, on any ground on which the underlying agreement may be set aside: Logwon Pty Limited v. Warringah Shire Council (1993) 33 NSWLR 13 at 28-30.

51 Another example is judgments arising from the registration of a certificate of judgment from another jurisdiction. If the judgment in that other jurisdiction is set aside or varied, then the judgment arising from registration can similarly be set aside or varied: Remilton v. City Mutual Life Assurance Society Limited (1907) 24 WN(NSW) 177, Bell v. Bell (1954) 73 WN(NSW) 7.

52 A judgment arising from a certificate pursuant to s 208J(3) of the 1987 Act is this kind of judgment; and is liable to be set aside or varied if the certificate on which it is based is set aside or varied: cf. Croker v. Commissioner of Taxation (2005) 145 FCR 150 at [14]. A further limitation of the effect of such a judgment is considered in Khoury v. Hiar [2006] NSWCA 47.

37. The decision indicates, consistently with the approach subsequently taken in Birdon , that the consequences of deeming a non-judicial determination to be a judgment of the court must be worked out having regard to the statutory context in which that device is adopted, and that it is not the case that such a deeming provision necessarily picks up every consequence that would apply to an ordinary judgment of the Court.

38. Counsel for Stowe sought to confine the significance of the decision in Doyle because, in the present case, unlike in Doyle , the beneficiary of the s 27 Judgment advanced no contentions as to the competence of the proceedings based on merger. However, the utility of Doyle is broader than the particular consequences said to flow from the filing of the costs assessor’s certificate in that case. Rather the case provides an example of a situation where the deeming of a non-judicial act to be a judgment does not necessarily carry with it all the consequences of to an ordinary judgment and the precise consequences of such a provision need to be worked out as a matter of statutory interpretation.

39. The filing of an adjudication certificate under the SOP Act clearly does not carry with it the ordinary consequences of a court judgment in terms of issue estoppel. The adjudication certificate is required to contain, inter alia, the adjudicated amount: s 26(3)(c). That is the central issue determined by an adjudication decision. Yet the Act clearly contemplates that on this issue there is no conclusiveness or finality because the existence of an adjudication decision or adjudication certificate or a judgment based on the adjudication certificate does not affect any civil proceedings arising under the underlying construction contract: s 38(2). The interim nature of the adjudication decision and a consequential judgment indicates that no issue estoppel in any ordinary sense arises but rather that the filing of the adjudication certificate is targeted at enforcement of the interim payment arrangement.

40. However, there is a more specific answer to Stowe’s contention. The only actual “issue” which Stowe contended was determined by the s 27 Judgment was the existence of an adjudication certificate and hence of an adjudication decision that was not vitiated by jurisdictional error. That is a matter which, unlike the matters determined by the adjudication decision, is not a matter set out in the adjudication certificate itself. Thus, it is not an issue determined by the adjudication decision or certificate but instead must be determined during the process of filing under s 27. That was said to be a consequence of the fact that a document purporting to be an adjudication certificate that was affected by jurisdictional error would not in law be an adjudication certificate and hence would not be able to be filed under s 27(1). However, an issue estoppel only arises from the decision of a judicial decision: see Spencer Bower and Handley, Res Judicata (Butterworths LexisNexis, 4th ed, 2009) at [2.01]. Pronouncements which are not decisions or not judicial decisions do not give rise to an issue estoppel: Spencer Bower and Handley at [2.10]. Therefore an issue estoppel could only arise if the acceptance of a document for filing was an exercise of judicial power involving a determination of that issue. A mere administrative action by a registry clerk or a registrar of the Court would not be capable of creating an issue estoppel. The acceptance or rejection of a document for filing is not an exercise of judicial power: Eastman v Higgins [2007] ACTSC 29 at [61], King v Higgins [2009] ACTSC 153 at [24]-[25]; Satchithanantham v National Australia Bank Ltd [2010] FCAFC 47 at [49]. Rather it is an administrative act. It therefore involved no binding determination of the status of the adjudication certificate and does not create an issue estoppel which would prevent a party contending that the adjudication decision was vitiated by jurisdictional error.

41. Therefore I do not accept the contention that proceedings SC217 must be dismissed because an issue estoppel precludes the plaintiff from contending that the March Payment Claim Decision is affected by jurisdictional error.

Second issue: Should SC217 be stayed or dismissed as an abuse of process?

Submissions

42. Stowe submitted that the true object of proceeding SC217 was not to obtain the relief supposedly sought. Rather, the object of that proceeding was to lay the groundwork for an ultimate application to set aside or otherwise impugn the judgment.

43. Stowe correctly identified that had Denham 810 pursued an application to set aside the judgment in the ordinary way, s 27(4)(b) of the SOP Act would have applied. That paragraph requires a person who starts a proceeding to “set aside” a judgment based on an adjudication certificate to “pay into court as security the unpaid part of the adjudicated amount pending the final decision of the proceeding”. However, s 27(4)(b) does not apply to an application for an order in the nature of certiorari quashing a determination as that is not an application to “set aside” a judgment based on an adjudication certificate: Surfabear Pty Ltd v GJ Drainage & Concrete Construction Pty Ltd [2010] 2 Qd R 366 at [42]; see also Chase at [57]-[59], [90]-[91], [107]-[108], [263]- [266].

44. However, Stowe submits that the Court can prevent litigants from avoiding s 27(4)(b) of the SOP Act by declining, at least immediately, to formally seek an order setting aside a judgment given under s 27 whilst pursuing litigation designed to indirectly impugn indirectly that judgment. For example, it remains open to this Court to prevent abuses of the processes of the Court and/or the Act using its ordinary powers to stay or dismiss proceedings such as its powers under r 3566 of the Court Procedures Rules 2006 (ACT) and its inherent or implied powers to similar effect. The exercise of powers of that nature are not limited to fixed categories: Rogers v The Queen (1994) 181 CLR 251 at 255; see also Williams v Spautz (1992) 174 CLR 509.

45. Stowe relies upon the decision in Tombleson v Dancorell Constructions [2007] NSWSC 1169. In that case a plaintiff sought prerogative relief to quash an adjudicator’s decision and interlocutory orders restraining enforcement of the decision or the judgment that had been filed based on the decision. At paragraphs 18 and 19 of her Honour’s reasons in that case, Justice Bergin said the following:

A plaintiff against whom a judgment has been entered who brings proceedings seeking to prevent a party from relying on that judgment without seeking to set aside the judgment, knows that s 25(4) of the [NSW Act - the counterpart to s 27(4) of the SOP Act] will not be triggered. However, the Court is not only cautious to ensure justice between the parties, but also to ensure that the legislation under which this application is brought is not circumvented.

… Pleadings may be analysed to see whether it is an abuse to seek those orders whilst not seeking to set aside judgment. If the Court is satisfied that such an application is for the purpose of getting around or circumventing the provisions of the Act then an order may be made staying the proceedings on the condition that such stay will remain unless money is paid into Court. Such an approach may diminish the drafting of innovative pleadings to ensure that s 25(4) is not triggered to obtain the benefit of proceedings in Court whilst the contractor loses the benefit of the Act.

46. Stowe makes the following submissions:

(a) The Court should conclude that the predominant purpose of these proceedings is to impugn the s 27 Judgment but in a way calculated to circumvent s 27(4) of the SOP Act and thereby deny Stowe the benefit of the Act.

(b) That purpose is an abuse of the processes of both the Court and the Act. It is an abuse of the processes of the Court in that “it is not [Denham 810]’s genuine purpose to obtain the relief sought in [proceeding SC217]”: see Rogers v The Queen (1994) 181 CLR 251 at 255. It is an abuse of the processes of the Act because the relief sought and not sought has been deliberately framed with a view to avoiding triggering s 29(4) of the Act and thereby obtain the benefit of proceedings in Court whilst Stowe loses the benefit of the Act.

(c) The Court should intervene to prevent the abuses of process from continuing. Proceeding SC217 should either be dismissed or, alternatively, the proceedings should be stayed until Denham 810 pays in Court the amount of the Judgment ($469,211.40) plus interest which has accrued thereon since proceeding SC217 was commenced.

47. Denham 810 relies on the decision in Surfabear in which Martin J rejected the submission that proceedings seeking that the decision of an adjudicator be declared void and restraining the beneficiary of that decision from taking any steps to enforce it were covered by the equivalent of s 27(4). His Honour determined that the words of the statute must be given effect and in circumstances where the relief being sought did not include the setting aside of the judgment that had been entered, the statutory provision which required payment of any outstanding balance into Court had no operation.

48. It also submits that Tombelson is distinguishable because in that case an injunction was sought pending final determination of the claim for prerogative relief that would restrain any enforcement of the arbitrator’s decision or any reliance on it.

Consideration

49. In the present case the most that can be said is that Denham 810 is seeking relief which is a step along the way to seeking the relief which would ultimately be necessary if it was successful. I am not satisfied that such a course involves an abuse of process. In my view it is not correct to categorise what the plaintiff is doing as using the process of the courts to achieve some foreign, improper or ulterior object.

50. Unlike the decision in Tombelson , the plaintiff in this case does not seek any injunction restraining the enforcement of the judgment that has been entered pursuant to the provisions of the SOP Act. As a consequence even if significant weight was to be given to the legislative scheme, the proceedings brought by the plaintiff are not, at this stage, inconsistent with that scheme because they leave open the capacity of Stowe to enforce the judgment pursuant to the provisions of the SOP Act.

51. For those reasons I would not consider it appropriate to make an order staying the proceedings on the ground of an abuse of process or on the ground that it was otherwise appropriate to grant a stay.

52. The further basis upon which the plaintiff argued that it was not appropriate to grant a stay was because it was exercising its entrenched right to bring proceedings for prerogative relief in relation to a decision of a statutory decision-maker which it alleged exceeded the jurisdiction given under the SOP Act. In my view the Court would be slow to characterise the invocation of the Court’s entrenched judicial review jurisdiction as an abuse of process by reason of an implication to be drawn from a statutory provision that was not directly applicable. In the present case, having regard to the fact that, in circumstances where the plaintiff has not sought to restrain the enforcement of the judgment created by s 27, there are alternative grounds upon which the present application can be disposed of, it is not necessary to finally resolve the more fundamental question about the relationship between statutory provisions such as 27(4) and the entrenched supervisory jurisdiction of this Court.

Third issue: Should SC218 be stayed because it has no utility?

Submissions

53. Stowe’s final submission was that regardless of the approach that the Court takes to proceeding SC217, proceeding SC218 should be dismissed or stayed on the grounds that that proceeding has no utility. The principal upon which Stowe relies is that courts do not ordinarily, as a matter of principle, determine proceedings which involve issues which are not live as between the parties: see South Australia v Lampard-Trevorrow [2008] SASC 370 at [20] and the authorities cited therein.

54. The lack of utility is said to arise in the present case because of the following matters:

(a) The March payment claim (which led to the s 27 Judgment) and the February payment claim (which led to the February Payment Claim Decision) overlap in the sense that the March payment claim included the amounts which were the subject of the February payment claim. There is nothing wrong with this. The Act specifically states that a claimant is not prevented “from including in a payment claim an amount that has been the subject of a previous claim”: s 15(6) of the Act.

(b) Given the overlapping nature of its February and March payment claims, Stowe accepts that it is not entitled to enforce both the s 27 Judgment (in which its rights under the March Payment Claim Decision have merged) and the February Payment Claim Decision. This is because, to do so, would result in double recovery to Stowe, something which would itself likely constitute an abuse of the processes of the SOP Act.

(c) In this way, Stowe does not propose to (and was prepared to undertake not to) take any steps to enforce or otherwise rely on the February Payment Claim Decision for so long as the s 27 Judgment remains enforceable.

(d) That being the case and given that there is no challenge to the s 27 Judgment, there would be no utility in the Court considering and ruling on Denham 810’s contention that the February Payment Claim Decision is invalid because no person intends to rely on the February Payment Claim Decision as a valid decision under the Act.

55. Stowe therefore submits that proceeding SC218 of 2014 should be stayed or dismissed with costs.

56. Denham 810 submitted that the proceedings do not lack utility because Stowe has not unequivocally and finally abandoned reliance upon the February payment claim decision. In those circumstances it contended that Stowe would be in a position to rely upon the earlier decision once Denham 810’s challenge to the later decision was successful.

Consideration

57. While I accept that proceedings which lack utility should not be determined, in the present case the issue becomes one of practical case management rather than involving any significant issue of principle. Stowe may wish to rely upon the February Payment Claim Decision if the March Payment Claim Decision is successfully challenged. Proceedings challenging both decisions are on foot and are in a position to be prepared for hearing. There is likely to be some overlap in the subject matter of, and issues in, the proceedings. If the proceeding in relation to the February Payment Claim Decision are dismissed now then, following determination of the challenge to the March Payment Claim Decision it will be necessary, if Denham 810 is successful and Stowe does not renounce reliance upon the February Payment Claim Decision, for Denham 810 to bring further proceedings to challenge that decision. In my view the time and resources of this Court and of the parties will be more efficiently used if both proceedings are heard together. There is a risk that some work involved will ultimately be found to have been wasted if Denham 810’s challenge to the March Payment Claim Decision is unsuccessful. However it is more appropriate to attempt to resolve the disputes between the parties in one go rather than contemplating serial challenges to decisions over a more extended period of time.

Orders

58. The orders of the Court are:

1. In proceedings SC217 of 2014 the application for orders 1 and 3 in the second defendant’s application dated 20 June 2014 is dismissed.

2. In proceedings SC218 of 2014 the application for orders 1 and 3 in the second defendant’s application dated 20 June 2014 is dismissed.

3. The proceedings are listed at 9.30am on 15 July 2014 for the purposes of directions (including the setting of a hearing date) as well as to deal with any question of costs in relation to the second defendant’s applications.

4. Proceedings SCA47 of 2014 and SCA48 of 2014 are to be listed for directions at the time outlined in Order 3.

I certify that the preceding fifty-eight [58] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Master Mossop.

Associate:

Date: