Reed v Eire [2009] NSWSC 678 (22 July 2009)


Last Updated: 23 July 2009





Reed v Eire [2009] NSWSC 678



Equity Division









22 July 2009



Reed Constructions Pty Limited v Eire Contractors Pty Limited



Macready AsJ



Not Applicable



Not Applicable



Not Applicable



Mr B DeBuse for plaintiff

Mr K Pierce & S Goldstein for defendant



HWL Ebsworth Lawyers

Budd & Piper for defendant



Administrative Law. Application to set aside determination under Building and Construction Industry Security of Payment Act 1999.Whether the decision was a nulity and whether there was a denial of natural justice resulting from the adjudicator's determination of the question of when a payment claim was served. Held not. Consideration of terms of Electronic Transactions Act 2000 . Trade and Commerce. Whether statements in adjudication application were misleading and deceptive. Held not and no effective causal link.









Paragraph 72









Wednesday 22 July 2009





1 His Honour: This the hearing of the plaintiff’s application under the Building and Construction Industry Security of Payment Act 1999 to set aside a determination made by Mr Damian Michael, the adjudicator.


2 The dispute arises out of a construction contract dated 10 November 2006 between the plaintiff and the defendant for civil works associated with a rising main from Richmond Hill Road to Nightcap Water Treatment Plant.


3 The contract included the terms and conditions of GC21.


4 Clause 30 of GC21 specified that notices to the contractor must be sent in a manner specified in items 4 to 11 of the subcontract information. Items 5 and 6 of the subcontract information provided that notices to the contractor must go to the contractor’s authorised person, this person was listed as Tom Burns. Details were provided for delivery by hand, by registered post, by facsimile or by email, with the relevant email address being .


5 The defendant made a payment claim in the amount of $610,179.32 (including GST) pursuant to the Building and Construction Industry Security for Payment Act 1999 . The adjudicator made a determination in favour of the defendant for $555,602.82.


6 The plaintiff submits that the determination by the adjudicator should be set aside on three grounds:


1. The adjudication is void.

2. There was misleading and deceptive conduct in obtaining the adjudication.

3. A breach of natural justice occurred in the course of the adjudication.

History of the payment claim


7 This is conveniently set out in the submissions from the parties and I will incorporate them in this judgment with some amendments.


8 Kylie Barr ( sent the payment claim as an attachment to an email. That email was addressed to Martin Diver ( and it was sent at 3.06pm on 6 November 2008. The email was marked as being of high importance, its subject being ‘Revised Eire Claim for Additional Works completed – Lismore Pipeline.’ The email was carbon copied to Tom Burns, Ray McIntyre and Tom Kelliher. Tom Burns is the contractor’s authorised person to whom notices should have been sent.


9 An email read receipt, sent from to Kylie Barr at Eire Contractors, recorded the email as read at 5.30am on 7 November 2008.


10 The contract did not specify a time for service of a payment schedule. Pursuant to section 14 (4) (b) (ii) of the Act, the plaintiff had ten business days to provide a payment schedule after the date it was “served“ with the payment claim.


11 The plaintiff delivered a payment schedule on 21 November 2008 and it disputed all but $52,487.50 of the claimed amount.


12 If the payment claim was served on 6 November 2008, the payment schedule was delivered outside of the ten business day limit provided by the Act. If it was served on 7 November 2008 the payment schedule was delivered within the ten business day limit. If no valid payment schedule had been served, the defendant could have proceeded to seek judgment relying on a default in service of the payment schedule.


13 Alternatively, whether or not a valid payment schedule had been served, the defendant could seek an adjudication of its payment claim. If no valid payment schedule had been served, the defendant was required to give notice, pursuant to Section 17(2) of the Act, to the plaintiff of their entitlement to provide a further payment schedule to them within five business days after receiving the notice. They did not do so.

14 Thereafter the defendant lodged an adjudication application on 5 December 2008, which the adjudicator accepted.


15 The defendant’s adjudication application did not address the question of the validity of the payment schedule. However it did identify the payment claim as having been served on 6 November 2008.


16 If the adjudication application was validly made, the plaintiff had the later of five business days from the defendant’s lodgement of the adjudication application or two business days from receipt of the adjudicator’s acceptance to lodge an adjudication response which was, at the latest, 16 December 2008 per s 20(1) of the Act.


17 The plaintiff did not lodge an adjudication response dealing with the substantive matters in the payment claim. Instead they challenged, in correspondence on 12 December 2008, the jurisdiction of the adjudicator to decide the issues submitted by the defendant in their adjudication application. That challenge was based upon the fact the defendant’s adjudication application asserted that service took place on 6 November 2008. The plaintiffs squarely raised the defendant’s failure to give a s 17 (2) notice and referred to authority to suggest that the application was invalid.


18 In response to the plaintiff’s submissions, the defendant, after 5pm on 15 December 2008, faxed to the adjudicator the email read receipt notification sent from to Kylie Barr. The read receipt was said to detail ‘proof of receipt’ of the payment claim by the plaintiff as occurring at 5.30am on 7 November 2009.


19 On 17 December the plaintiff replied to the adjudicator with more submissions.


20 In his adjudication on 2 January 2009 the adjudicator relied on the email proof of receipt to decide that service was effected on 7 December 2008. He made a determination in favour of the defendant in the amount of $555,602.82. This was because the plaintiff had not disputed the various factual matters raised in the adjudication application in their letter of 12 December 2008. Whether they could have, on the view they were propounding – that there was no valid service – is doubtful, since s 20(2B) of the Act provided that an adjudication response cannot include any reasons for withholding payment where those reasons have been included in a payment schedule.


The plaintiff’s argument


21 Although it may not be ultimately decisive, it useful to address the difficulties involved with the question of when the payment claim was served.


22 In Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 at Hodgson JA addressed questions which related to service under the Act in these terms:


“[57] Accordingly, it is not strictly necessary to express a view as to fine questions of construction under the Act. However, it is in my opinion appropriate to express views about this, because of the importance of clarity on this matter.


[58] In the first place, in my opinion it is clear that if a document has actually been received and come to the attention of a person to be served or provided with the document, or of a person with authority to deal with such a document on behalf of a person or corporation to be served or provided with the document, it does not matter whether or not any facultative regime has been complied with: see Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542 ; Mohamed v Farah [2004] NSWSC 482 at [42] –[44]. In such a case, there has been service, provision and receipt.


[59] Next, I agree with the view expressed by Einstein J in Taylor Projects Group Pty Ltd v Brick Department Pty Ltd [2005] NSWSC 439 at [16] that payment claims are notices within s 31 of the Act; and in my opinion also, a payment schedule is also such a notice. Accordingly, s 31 of the Act plainly applies in relation to service of payment claims. The question then is whether it also applies to provision of payment schedules.


[60] One relevant factor in approaching this question is that it seems to me highly unlikely that it was the intention of the legislature that provision of a payment schedule only occurs if the document actually comes into the hands of some person on behalf of the claimant. If that were the case, a claimant could acquire a cause of action under ss 14 and 15 of the Act by serving a payment claim, and then ensuring that no-one was at the claimant’s address or registered office until expiry of the time for provision of a payment schedule.


[61] The use of the word “provide” rather than the word “serve” does carry a suggestion that a different meaning is intended, and that accordingly s 31 does not apply in the case of the word “provide”. Against this, however, I do not think the legislature would have (1) used a problematic word like “provide” with the intention that it have a different meaning from “serve”, (2) given useful instructions as to how service may be effected, yet (3) given no instructions whatsoever as to how provision may be effected. When this consideration is combined with the consideration raised in the previous paragraph, in my opinion this justifies the conclusion, reached by the primary judge in this case, that “provide” does not mean anything different from “serve”, and that s 31 applies to “provision” as well as to “service”.


[62] There remains the question of whether the time at which service or provision has taken effect is also the time at which a document is received, for the purposes of s 17(3)(b) (and see also s 17(2)(b) and s 21). I note that the word “receive” is also used in s 31(2), but used in the context of “received at that place”. In my opinion, mail delivered to a registered office or place of business is received at that place when it is put into the mail box of that registered office or place of business, without the necessity of anyone actually seeing it.


[63] In my opinion, the word “receive” in s 17(3)(c) does not necessarily require that the document come to the notice of a person authorised to deal with the document on behalf of the claimant. In general, in my opinion, it would be satisfied once the document has arrived at the claimant’s registered office or place of business and is there during normal office hours. There may be circumstances in which service or provision has been effected within s 109X of the Corporations Act or s 31 of the Act, but the document has not been received, but I find it difficult to identify any such circumstances.”


23 In this case we are concerned with the words in section 14 (4) (a) “a claimant serves a payment claim on a respondent”.

24 Section 31 (1) (e) permits service in a matter provided that in the construction contract. The actual construction contract in this matter provided for service in this form:


6 Notices to the Contractor

Mentioned in clause 30

Notices must go to the Contractor's Authorised Person listed above, at the address or number shown here.

Office address:

(for delivery by hand)

Level 3, 42 McLaren Street

North Sydney

NSW 2060

Postal address:

(for delivery by registered post)

PO Box 6395

North Sydney

NSW 2060

Facsimile number:

(02) 99558812

e-mail address”




25 This raises the question of what is service by email? This question was addressed by Austin J in Austar Finance v Campbell [2007] NSWSC 1493 in paragraphs 48 to 55 in these terms:


“[48] For the purposes of the law of service of documents, facsimile and e-mail transmissions share the common characteristic that the hardcopy document in the hands of the sender is retained, but an electronic image of it is transmitted to a point from which it can be accessed and printed by the receiver. But there are some differences that may be significant with respect to service. In particular, a facsimile transmission is received and (usually) electronically stored in the receiver's fax machine, and is automatically printed out on paper supplied by the receiver. On the other hand, an e-mail is transmitted to and electronically stored by a server which is normally not located in the receiver's premises, and positive action is needed on the part of the receiver to read the e-mail (by accessing it through his or her computer) and to obtain a hard copy (by directing the computer to send the e-mail to the receiver's printer).


[49] Notwithstanding these differences, in my view electronic transmission, whether by facsimile or e-mail, cannot constitute service for the purposes of s 459G(3) unless either:


it is shown that the documents electronically transmitted have actually been received in a readable form by the person to be served; or


the case falls within one of the special exceptions permitted by rules of court.


[50] The notion that service is effective if the documents are actually received in readable form derives from the liberal interpretation of the concept of personal service identified in such cases as Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542 (at 544). Several cases have applied this line of reasoning to facsimile transmission. Thus, in NM Superannuation Pty Ltd v Hughes (1992) 27 NSWLR 26 , a case about whether a notice had been validly sent pursuant to the rules of a superannuation fund, Cohen J said (at 35):


"I see no reason for finding that a notice sent and received by facsimile transmission is any less a notice in writing than one which is sent and received in any other fashion."


[51] In Hastie & Jenkerson (a firm) v McMahon [1991] 1 All ER 255 , the English Court of Appeal held that service of a list of documents in accordance with the direction of the court was effected by sending and receipt of a facsimile copy of the list.


[52] In Australian Securities Commission v Bank Leumi Le-Israel (Switzerland) [1996] FCA 1789 ; (1996) 69 FCR 531 , a case about whether shareholder tracing notices had been "given", Lehane J referred to these two cases and said (at 550) that they "clearly establish that there is nothing in the nature of facsimile transmission which excludes it as a means of giving or serving a document", although the time limits in the provisions he was considering would be enlivened only upon actual receipt of the notice in full and legible form.


[53] Those decisions were applied by Debelle J in Dwyer v Canon Australia Pty Ltd [2007] SASC 100 where the question related to efficacy of service of an originating process under the Corporations Act on a company. His Honour emphasised that the documents sent by facsimile must come to the notice of the person for whom they are intended, and observed that mere arrival at the receiving facsimile machine is not a completed act of service (at [7]).


[54] In Seventh Cameo Nominees Pty Ltd v Holdway Pty Ltd (Supreme Court of Victoria (unreported, Chernov J, 24 April 1998) it was held that an application to set aside a statutory demand and the supporting affidavit, filed within the time limit, transmitted by facsimile and received all on the same day, were validly served for the purposes of s 459G(3).


[55] In my opinion the reasoning in these cases also applies to e-mail transmission, provided there is evidence that the document came to the notice of the person to be served, and the document was in readable form.”


26 His Honour went on to consider a number of exceptions and his reasoning was directed to proof of service by actual receipt in a readable form by the person to be served. An email read receipt appears to satisfy these elements. This functionality obviously differs depending on the software being used, however it can be generally said that this is an opt-in program which allows the addressee of an email to choose whether or not to notify the sender of an email that they had received and/or read that communication. We are concerned with whether actual service and time of service can be established other than by an email read receipt.


27 Section 13 of the Electronic Transactions Act 2000 provides as follows:


13 Time and place of dispatch and receipt of electronic communications


(1) For the purposes of a law of this jurisdiction, if an electronic communication enters a single information system outside the control of the originator, then, unless otherwise agreed between the originator and the addressee of the electronic communication, the dispatch of the electronic communication occurs when it enters that information system.


(2) For the purposes of a law of this jurisdiction, if an electronic communication enters successively 2 or more information systems outside the control of the originator, then, unless otherwise agreed between the originator and the addressee of the electronic communication, the dispatch of the electronic communication occurs when it enters the first of those information systems.


(3) For the purposes of a law of this jurisdiction, if the addressee of an electronic communication has designated an information system for the purpose of receiving electronic communications, then, unless otherwise agreed between the originator and the addressee of the electronic communication, the time of receipt of the electronic communication is the time when the electronic communication enters that information system.


(4) For the purposes of a law of this jurisdiction, if the addressee of an electronic communication has not designated an information system for the purpose of receiving electronic communications, then, unless otherwise agreed between the originator and the addressee of the electronic communication, the time of receipt of the electronic communication is the time when the electronic communication comes to the attention of the addressee.


(5) For the purposes of a law of this jurisdiction, unless otherwise agreed between the originator and the addressee of an electronic communication:


(a) the electronic communication is taken to have been dispatched from the originator’s place of business, and


(b) the electronic communication is taken to have been received at the addressee’s place of business.


(6) For the purposes of the application of subsection (5) to an electronic communication:


(a) if the originator or addressee has more than one place of business, and one of those places has a closer relationship to the underlying transaction—it is to be assumed that that place of business is the originator’s or addressee’s only place of business, and


(b) if the originator or addressee has more than one place of business, but paragraph (a) does not apply—it is to be assumed that the originator’s or addressee’s principal place of business is the originator’s or addressee’s only place of business, and


(c) if the originator or addressee does not have a place of business—it is to be assumed that the originator’s or addressee’s place of business is the place where the originator or addressee ordinarily resides.


(7) The regulations may provide that this section does not apply to a specified electronic communication or specified class of electronic communications.


(8) The regulations may provide that this section does not apply to a specified law of this jurisdiction.


28 The relevant definitions in the Act are as follows:


“information means information in the form of data, text, images or sound.


information system means a system for generating, sending, receiving, storing or otherwise processing electronic communications.”


29 The relevant section of the Electronic Transactions Act 2000 (NSW) is sub-section 3 of section 13 , which indicates that receipt of a document is effected when an electronic communication enters a designated information system. This raises two questions. The first question is whether ‘receipt’ as defined in the Electronic Transactions Act equates to service. The second question asks whether an email address is an information system or simply a direction to an information system.

30 In regard to the second question, arguably the answer is that an email address is both things. An email address points electronic communications to an information system which will process that communication. However, when an electronic communication is sent, the domain name part of the email address (in this instance, ‘’) actually alerts one server, or a number of servers, that have been programmed to listen to requests for that domain name. A mail server will process emails sent to or from that domain and allocate emails according to designated user accounts (relevantly, ‘mdiver’ and ‘tburns’). Therefore, an email address is not simply a passive description of where mail should go but it is an active information system which performs a function within the meaning of the Electronic Transactions Act .


31 Does receipt equate to service? Sections 13(3) and 13 (4) draw the distinction between electronic communications sent to a designated information system and those that are not. Section 13(3) provides that if an information system has been designated, it can be inferred that receipt into that information system equates to service. If no information system has been identified, then under s 13(4) , receipt occurs when the communication comes to the attention of the addressee. Therefore, if s 13(3) applies, evidence must be adduced of when the email entered the information system, not when the email came to the attention of the addressee, meaning that the read receipt is not relevant. Evidence of the time an email entered a mail server would presumably be adduced through some kind of email exchange log generated by that server. The evidence does not indicate whether this is data that is regularly logged by mail servers and if so, whether there may be a question as to the length of time this information is stored.


32 Section 13(3) of the Electronic Transactions Act does away with the requirement of notice of the documents in a readable form being given to the person to be served. This suggests the Act takes the view that electronic communications are more or less instantaneous. This has the benefit of preventing an addressee from deliberately not downloading and opening and email and/or enabling a read receipt. However, it does place the onus on the addressee to take the initiative to make themselves aware of the communication. These are the actions his Honour Justice Austin discusses in Austar Finance v Campbell .


33 For completeness, it is worth mentioning the process of receiving an electronic communication as defined under s 13(4) of the Electronic Transactions Act . An electronic communication that has been sent to an addressee who has not designated an information system for the purpose of receiving that communication, would presumably be an electronic communication that is put onto on a computer readable storage medium, such as a USB drive or a CD ROM; sent over a private network; sent through some other kind of router that does not require a specific destination for handling electronic communications; or published on the Internet. This is not an exhaustive list. Each example would require different forms of evidence to establish receipt by the addressee.


34 I have mentioned that Austin J details a series of active steps one must take to access an email from a mail server and this can be done through a variety of platforms, such as via a computer or a mobile phone. Additionally the mail server might be hosted by a third party or located in-house. As his Honour points out, this is in contrast to service via facsimile where a document is “left” at the premises where the fax machine is located. What is important, however, and what we must return to, is the point at which the communication reaches a mail server from which the recipient can access it. There is no technical evidence available from the email on this point other than it left the sender’s computer on 3:06 pm on Thursday 6 November 2008.


35 If a destination mail server is very busy or if an email has been incorrectly addressed, a ‘bounced’ message is usually returned to sender with details of the problem. However, if a sending mail server can locate a domain it is trying to contact but cannot for some reason dispatch the communication to the designated user account, it may hold onto the communication for some time in order to try again. Alternatively a destination mail server may be off-line for some reason. Therefore, in the absence of evidence to assist me, I would be reluctant to infer that the recipient server received the email on the same day that it was sent.


36 It is necessary to consider how the adjudicator decided the matter. He was not referred s 13. In his adjudication at paragraphs 4 and 5 he referred to the actual emails and the parties’ contentions that were contained in the correspondence of 12 December 2008 and 15 December 2008. His comments at paragraphs 5, 6, 7, and 8 are as follows:


“(5) The Respondent's correspondence of 12 December 2008 firstly raised its issue with respect to the validity of the adjudication application. The Claimant on 15 December 2008 provided evidence of the Respondent receiving the payment claim on 7 November 2008. This was furnished by the Claimant in the form of a copied email from Mr Martin Diver, an apparent representative of the Respondent, embossed on Friday, 7 November 2008 at 5.30 am. The Claimant in further correspondence on 15 December 2008 attempted to explain the machinery of email with respect to the feature of ‘read receipt’ for the sender and receiver of an email. The Respondent replied to the Claimant's correspondence of 15 December 2008 on 17 December 2008. The Respondent conceded:


“...this read receipt (at 5.20am [sic] on 7 November 2008) relates to the opening of the email which attached the Claimant's purported payment claimed [sic] which was sent via email to the offices of the Respondent."


(6) The Respondent's correspondence of 12 th and 17 th December 2008 requested the Claimant to withdraw the adjudication application. I received correspondence from the Respondent's lawyers on 2 January 2009 conf i rming that it had not received a response from me with respect to the aforementioned correspondences. I considered that the Respondent did not request a separate response from me regarding the validity issue of the adjudication application, nor was I required to do so. The Claimant, did not to my knowledge, seek to withdraw the adjudication application.


(7) The Respondent does not dispute that the payment claim was served by the Claimant or received by the Respondent on 7 November 2008, nor does the Respondent dispute the authenticity of the ‘read receipt’ emailed by the Respondent to the Claimant. In the absence of the Respondent providing evidence sufficient to establish a cogent explanation contrary to the Claimant's position with respect to the Respondent's receipt of the payment claim on 7 November 2008, I am satisfied that the payment claim was served on the Respondent on 7 November 2008. Whilst I acknowledge that the application page at the front of the adjudication application reflects the payment claim date as 6 November 2008, I do not consider that this affects the outcome of my finding. I consider that the Claimant’s evidence supports the date of service as 7 November 2008 because the ‘read receipt’ demonstrates that the payment claim was received in the receiver's computer and that it came to the attention of Mr Diver on this date. In this case, I am satisfied that there was service, provision and receipt of the payment claim on 7 November 2008.


(8) Based on my finding with respect to the service date of the payment claim, it is not necessary for me to determine whether the Claimant did not satisfy the precondition of affording the Respondent an opportunity to provide a payment schedule under s 17(2) of the Act prior to filing the adjudication application with Adjudicate Today. Nor do I consider the Claimant was obliged to serve notice of its intention to apply for adjudication of the payment claim.


37 It is plain that the adjudicator considered the submissions made to him and he came to a decision on the question of whether or not service occurred on 6 or 7 November 2008. Leaving aside the question of whether his decision was correct or incorrect his conclusion that service was on 7 November 2008 meant that his comments (in 8 above) were correct.


Is the adjudication a nullity?


38 Was the payment claim served within time under s 14 (4)(b)(ii) and consequently did an obligation arise under s 17 (2)(a) to give notice, which would allow service of a new payment claim?


39 In Brodyn Pty Ltd t/as Time Cost and Quality v Davenport, 61 NSWLR 421 [2004] NSWCA 394 the Court considered the requirements laid down by the Act which were essential for there to be a valid determination. At paragraphs 53 to 56 Hodgson JA with whom Mason P agreed said the following:


‘[53] What then are the conditions laid down for the existence of an adjudicator’s determination? The basic and essential requirements appear to include the following:


1. The existence of a construction contract between the claimant and the respondent, to which the Act applies (ss 7 and 8).


2. The service by the claimant on the respondent of a payment claim (s 13).

3. The making of an adjudication application by the claimant to an authorised nominating authority (s 17).


4. The reference of the application to an eligible adjudicator, who accepts the application (ss 18 and 19).


5. The determination by the adjudicator of this application (ss 19(2) and 21(5)), by determining the amount of the progress payment, the date on which it becomes or became due and the rate of interest payable (ss 22(1)) and the issue of a determination in writing (ss 22(3)(a)).


[54] The relevant sections contain more detailed requirements: for example, s 13(2) as to the content of payment claims; s 17 as to the time when an adjudication application can be made and as to its contents; s 21 as to the time when an adjudication application may be determined; and s 22 as to the matters to be considered by the adjudicator and the provision of reasons. A question arises whether any non-compliance with any of these requirements has the effect that a purported determination is void, that is, is not in truth an adjudicator’s determination. That question has been approached in the first instance decision by asking whether an error by the adjudicator in determining whether any of these requirements is satisfied is a jurisdictional or non-jurisdictional error. I think that approach has tended to cast the net too widely; and I think it is preferable to ask whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator’s determination.


[55] In my opinion, the reasons given above for excluding judicial review on the basis of non-jurisdictional error of law justify the conclusion that the legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination: cf. Project Blue Sky Inc. v. Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 390-91. What was intended to be essential was compliance with the basic requirements (and those set out above may not be exhaustive), a bona fide attempt by the adjudicator to exercise the relevant power relating to the subject matter of the legislation and reasonably capable of reference to this power (cf. R v. Hickman; Ex Parte Fox and Clinton [1945] HCA 53 ; (1945) 70 CLR 598) , and no substantial denial of the measure of natural justice that the Act requires to be given. If the basic requirements are not complied with, or if a purported determination is not such a bona fide attempt, or if there is a substantial denial of this measure of natural justice, then in my opinion a purported determination will be void and not merely voidable, because there will then not, in my opinion, be satisfaction of requirements that the legislature has indicated as essential to the existence of a determination. If a question is raised before an adjudicator as to whether more detailed requirements have been exactly complied with, a failure to address that question could indicate that there was not a bona fide attempt to exercise the power; but if the question is addressed, then the determination will not be made void simply because of an erroneous decision that they were complied with or as to the consequences of non-compliance.


[56] It was said in the passage in Anisminic quoted by McDougall J that a decision may be a nullity if a tribunal has refused to take into account something it was required to take into account, or based its decision on something it had no right to take into account. However, in Craig v. South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 177 the High Court said that this would involve jurisdictional error if compliance with the requirement in question was made a pre-condition of the existence of any authority to make the decision. I do not think that compliance with the requirements of s 22(2) are made such pre-conditions, for the same reasons as I considered the determination not to be subject to challenge for mere error of law on the face of the record. The matters in s 22(2), especially in pars (b), (c) and (d), could involve extremely doubtful questions of fact or law: for example, whether a particular provision, say an alleged variation, is or is not a provision of the construction contract; or whether a submission is “duly made” by a claimant, if not contained in the adjudication application (s 17(3)(b)), or by a respondent, if there is a dispute as to the time when a relevant document was received (ss 20(1), 22(2)). In my opinion, it is sufficient to avoid invalidity if an adjudicator either does consider only the matters referred to in s 22(2), or bona fide addresses the requirements of s 22(2) as to what is to be considered. To that extent, I disagree with the views expressed by Palmer J in Multiplex Constructions Pty. Limited v. Luikens [2003] NSWSC 1140.


40 At [54] his Honour determines the parts of s 17 that refer to the time when an adjudication application can be made and its contents as being one of the more detailed requirements of that section.


41 In Kell & Rigby Pty Ltd v Guardian International Properties Pty Ltd [2007] NSWSC 554 Bergin J dealt with a case similar to the potential situation in these proceedings, where a builder served a claim on the proprietor who did not serve a payment schedule within the specified time but did serve a payment schedule out of time.


42 An adjudication application was made, an adjudicator appointed and at the hearing both parties agreed that there had been no payment schedule served within time and no compliance with s 17 (2) of the Act. In those circumstances the adjudicator decided not to proceed with the adjudication. Her Honour Justice Bergin had to deal with a limited aspect of the matter and she held that the application was a nullity by reason of the plaintiff’s failure to comply with s 17(2) of the Act.


43 As has been pointed out in later cases, this was a case where, on its facts, the adjudicator did not make a decision about compliance with time limits. Hence the case did not give rise to the question in the present case of whether an actual obligation to give notice arose under s 17(2) of the Act.


44 In Taylor Projects Group Pty Ltd v Brick Dept Pty Ltd , [2005] NSWSC 439 there was a dispute about a payment claim in similar circumstances to the present matter. Although it was not necessary for his decision, Einstein J considered whether an adjudicator’s decision was in error because the adjudicator assessed the time in which the application must be made by reference to the requirement in section 17(3)(e) rather than the requirement in section 17(3)(c). His Honour held this error would not lead to a failure to satisfy one of the basic requirements. This is an approach that treats timing under s 17 as one of “the more detailed requirements” and provided the matter is dealt with bona fide by the adjudicator, in accordance with the requirements of natural justice, it would not lead to a determination being a nullity even if wrongly decided.


45 A similar point was considered in Multipower Corporation Pty Ltd v S & H Electrics Pty Ltd [2006] NSWSC 757. McDougall J was concerned with a relevant time limit under s 17(3) and he concluded that assuming the adjudicator made an error there would have been an error within the scope of the jurisdiction that is entrusted to adjudicators; a mistake the adjudicator would have been entitled to make.

46 These three cases were considered by Rein J in JAR Developments Pty Ltd v Castleplex Pty Ltd [2007] NSWSC 737. Again this was a case dealing with time limits in s 17 in a dispute as to service. After dealing with the cases to which I referred to above and a number of other cases, his Honour at paragraphs 47 to 49 said the following:


“[47] Although Kell & Rigby is authority for the proposition that failure to adhere to time constraints set out in the Act will render an adjudication application void, Kell & Rigby was a case in which the adjudicator had refused to proceed (for that very reason) and the Court therefore did not have to consider what would be the effect of an adjudication in which an error as to compliance with the time limit was made. It is therefore not inconsistent with Schokman v Xception Construction Pty Ltd [2005] NSWSC 297 and Taylor .


[48] Kell & Rigby deals with the consequences where failure to meet time limits imposed by the Act is established at the adjudication. It is implicit that the adjudicator has no power to excuse or waive a failure to meet a time limit imposed by the Act: see also Emag Constructions Pty Ltd v Highrise Concrete Contractors (Aust) Pty Ltd [2003] NSWSC 903 at [35] , [38] and [39]. Brodyn at [53]-[55] is however dealing with the question of the effect of an erroneous determination by an adjudicator that time limits or other detailed requirements (as opposed to basic and fundamental requirements) have been met. JAR placed emphasis on the decision of Basten JA in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229 , and his Honour’s reference to determination of an objective fact, although his comment related to situations where mandatory requirements were not met or where the determination went beyond the parameters of the claim and were not, it appears, directed to the detailed requirements. It was not argued before me even on a formal basis that Brodyn was wrongly decided, and I do not think it is necessary or appropriate to consider whether or not what was said by Basten JA in Coordinated Construction Co or what had been said by McHugh HA in GJ Coles & Co Ltd v Retail Trade Industrial Tribunal (1986) 7 NSWLR 503 involves, or might logically lead to, a qualification to the unanimous view of the Court in Brodyn .



[49] Given that both McDougall J and Einstein J (although obiter in Taylor ) have concluded that the reasoning in Brodyn leads to the conclusion that an adjudication in which the adjudicator erroneously but bona fide and in accordance with the rules of natural justice determines, that a requisite time limit has been met, will not thereby be rendered void, and since, with respect, I am not persuaded that they are wrong to so conclude, it is appropriate that I follow Multipower .”


47 I agree with his Honour’s analysis and given that the adjudicator in this matter has plainly considered the submissions that were put to him, there is no nullity if the adjudicator got it wrong. He was entitled to come to his decision whether right or wrong and the decision cannot be attacked on this basis.


There was misleading and deceptive conduct in obtaining the adjudication


48 This was expressed in the plaintiff’s submissions at paragraph 37 in these terms:


“Alternatively there was a representation by Eire contained in the Adjudication Application of a fact, being the date which Eire relied upon as the date of service of the Payment Claim and the date of the service of the Payment Schedule served by Reed Constructions as a Payment Schedule. The only conclusion that could be drawn from the representation was that the dates of service of the respective documents were more than 10 days apart. Those facts taken together lead to the conclusion that the Adjudication Application was made without there being a valid Payment Schedule. That was the conclusion reached by Reed Constructions. On the alleged facts that was the only conclusion available. It was a representation which was misleading.”


49 The plaintiff’s submission continued:


“Where the misleading and deceptive conduct takes place in the course of the requirements of compliance with the Act then relief will be available under the Trade Practices Act 1975 (Cwth) not withstanding the provisions of the Act. See Bitannia Pty Ltd v Parkline Constructions Pty Ltd 67 NSWLR 9.”


50 The case referred to in the submissions was proceedings in the District Court pursuant to s 15 (4) of the Act where there had been a failure to provide a payment schedule. It was held that s 15 (4)(b)(ii) of the Act does not preclude a party from raising, by way of a defence to a claim based on a failure to provide a payment schedule, a contention that the service was not effective because it involved misleading or deceptive conduct. Such a defence is not in relation to matters arising under the construction contract.


51 In this case, however, I am not concerned with a claimant suing on its entitlement at law arising from non-payment of a progress claim, but an adjudication under the Act. The summons contains a claim seeking a declaration that there was misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1975 (Cth) and an order under s 80 or 87 of the Trade Practices Act that the defendant be restrained from relying upon the adjudication and/or setting the adjudication aside.


52 Leaving aside the question of whether or not a defence might be available in the present circumstances, the defendant’s position was that there was no misleading or deceptive conduct and no loss or damage was suffered.


53 The often-quoted joint decision of Justices Deane and Fitzgerald in Taco Company of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136 ; (1982) 42 ALR 177 , at pages 202 to 203, provides useful guidance in working out whether conduct is misleading or deceptive within the meaning of s 52. They state,


“First, it is necessary to identify the relevant section (or sections) of the public (which may be the public at large) by reference to whom the question of whether conduct is, or is likely to be, misleading or deceptive falls to be tested ( Weitmann v Katies Ltd (1977) 29 FLR 336 , per Franki J at 339–40, cited with approval by Bowen CJ and Franki J in Brock v Terrace Times Pty Ltd [1982] FCA 10 ; (1982) 40 ALR 97 at 99 ; [1982] ATPR 40-267 at 43,412).


Second, once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, “including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations”: Puxu Pty Ltd v Parkdale Custom Built Furniture Pty Ltd (1980) 31 ALR 73 , per Lockhart J at 93: see also World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 199, per Brennan J (16 ALR at 203).


Thirdly, evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading or deceptive or likely to mislead or deceive. The court must determine that question for itself. The test is objective (see, generally, Annand & Thompson Pty Ltd v Trade Practices Commission [1979] FCA 36 ; (1979) 25 ALR 91 per Franki J at 102; Sterling v Trade Practices Commission (1981) 35 ALR 59 , per Franki J (with whom Northop J agreed) at 66 and per Keely J at 69; Snoid v Handley (1981) 38 ALR 383 , per the court (Bowen CJ, Northrop and Morling JJ); and Brock v Terrace Times, supra per Bowen CJ and Franki J).


Finally, it is necessary to inquire why proven misconception has arisen: Hornsby Building Information Centre v Sydney Building Information Centre (18 ALR at 647 140 CLR at 228). The fundamental importance of this principle is that it is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent.”


54 In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 42 ALR 1 Gibbs CJ, at pages 6 to 7, somewhat qualified and further explained the guidelines in Taco Company of Australia v Taco Bell by stating,


“In McWilliams v McDonalds [1980] FCA 159 ; (1980) 33 ALR 394 it was rightly held by Smithers J and by Fisher J that to prove a breach of s 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder ...


Section 52 does not expressly state what persons or class of persons should be considered as the possible victims for the purpose of deciding whether conduct is misleading or deceptive or likely to mislead or deceive. ... the section must, in my opinion, be regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will of course depend on all the circumstances. ...


The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where the conduct complained of consists of words, it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. The same is true of facts.”


55 The alleged misrepresentation was said to have arisen out of an adjudication application. That document was necessary to invoke the processes of the Act to seek adjudication and the parties who were likely to be mislead or deceived by its contents were the adjudicator and the plaintiff, however the plaintiff only claims it was they who were mislead. Consideration of whether the defendant’s representation that the dates of service of the relevant documents were more than 10 days apart was misleading or deceptive, or likely to mislead or deceive, should be analysed by reference to the relative position and knowledge of the plaintiff and by regard to whether a reasonable person in the same class as the plaintiff would have been mislead, even of they had taken reasonable care of their own interests.


56 Did the plaintiff form an erroneous conclusion that the adjudication application was made without a valid payment schedule? It is clear that the person who received the adjudication application was Mr Mark Diver. He was also the person who opened the email that enclosed the payment claim and he was aware that it had been sent at 3.06pm on 6 November 2008. He also noticed on opening the adjudication application that the date of the payment claim was 6 November 2008. He was aware that no notice pursuant to 17 (2) had been received and he took steps to have the matter raised with the adjudicator. In discussions with his co-workers at the time he acknowledged that he might not have been able to lodge a thorough adjudication response dealing with the factual matters because the payment schedule was invalid as it was out of time. Nevertheless he did all the work necessary to deal with the factual matters that would be in the adjudication response and he commenced work on it.


57 It seems that Mr Diver was then informed that a decision had been made to make submissions to the adjudicator about the lack of s 17 (2) notice. It is also to be noted that Mr Diver was well aware that he opened the email on 7 November 2008.


58 Reliance on a representation is a commonly expressed way of enquiring into loss or damage by conduct contravening the proscription on engaging in misleading or deceptive conduct. In Wardley Australia Ltd v The State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525 Mason CJ and Dawson, Gaudron and McHugh JJ said that when concerned with contravention in the form of misleading or deceptive conduct constituted by misrepresentation –


“in this situation, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connexion to satisfy the concept of causation.”


59 As has been said, it should not be forgotten, in determining reliance, that the essential question is causation. Causation in law is not a scientific matter, but as was said in March v E & M Stramare Pty Ltd [1991] HCA 12 ; (1991) 171 CLR 506 at 515, repeating from Fitzgerald v Penn [1954] HCA 74 ; (1954) 91 CLR 268 at 277-8, it is “ultimately a matter of common sense”.


60 What is the connection between the conduct of the defendant and the plaintiff’s alleged erroneous assumption about the lack of notice under s 17(2)? The plaintiff had at the latest until 16 December 2008 to lodge an adjudication response. On 15 December after 5 pm the plaintiff’s solicitor received from the defendant the facsimile attaching proof of receipt of the payment claim, which it made it clear the defendant intended to assert that notice had been served in time. Given that Mr Diver knew all the facts as to service of the email it is hard to see how the receipt of the adjudication application constituted misleading and deceptive conduct. He knew before receiving the adjudication application that the email had been sent on 6 November 2008. What seems to have happened is the realisation of the affect of the late service of his payment schedule occurred to him and some decision was made, not by him, but by Mr Hughes or someone advising the company, that the best way forward was to address the lack of notice under s 17 (2).


61 Mr Diver does not himself say that he made the decision which way to proceed.


62 The other matter to note is that the alleged misrepresentation is conduct, as I have pointed out, in relation to what appears in an adjudication application. That is but a document in which one side is putting forward to an adjudicator its contentions as to the fact and circumstances. It was open for the defendant to put its own contentions forward as to service and if they were that service was effected on 7 November 2008 that it could rely upon the payment schedule. As discussed, the decision in Parkdale makes it clear that it would be wrong to look at these contentions without regard to the wider circumstances.


63 In the absence of evidence from the person who made the decision as to which way to proceed, I am not satisfied that what is said to be the misleading conduct caused the actions to be taken. Having regard to the nature of the document being merely a party’s contention as to what would be advanced in a disputed adjudication they also could not be said to be on their face misleading and deceptive.


Denial of natural justice


64 Brodyn Pty Ltd t/as Time Cost and Quality v Davenport, 61 NSWLR 421 [2004] NSWCA 394 His Honour Mr Justice Hodgson dealt with the questions of natural justice at para 57 in these terms:


“[57] The circumstance that the legislation requires notice to the respondent and an opportunity to the respondent to make submissions (ss.17(1) and (2), 20, 21(1), 22(2)(d)) confirms that natural justice is to be afforded to the extent contemplated by these provisions; and in my opinion, such is the importance generally of natural justice that one can infer a legislative intention that this is essential to validity, so that if there is a failure by the adjudicator to receive and consider submissions, occasioned by breach of these provisions, the determination will be a nullity. On this basis, I agree with the result reached in Emag Constructions Pty. Limited v. Highrise Concrete Contractors (Aust) Pty. Limited [2003] NSWSC 903. I note there is some controversy as to whether denial of natural justice generally results in voidness or voidability (see for example Ridge v. Baldwin [1963] UKHL 2 ; [1964] AC 40 , Durayappah v. Fernando [1967] 2 AC 337 , Banks v. Transport Regulation Board (Vic) [1968] HCA 23 ; (1968) 119 CLR 222 at 233, Calvin v. Carr [1979] UKPC 1 ; [1980] AC 574 at 589-90, Minister for Immigration v. Bhardwaj [2002] HCA 11 ; (2002) 209 CLR 597 at 630-34); but in my opinion, in cases such as this where there is a disclosed legislative intention to make a particular measure of natural justice a pre-condition of validity, failure to afford that measure of natural justice does make the determination void.’


65 In effect the plaintiff says there was a denial of natural justice in that an adjudicator received submissions on 15 December 2008, which the adjudicator accepted, and that the plaintiff lost the opportunity to put an adjudication response.


66 The plaintiff’s written submissions included the following:


“The nature, effect and gravity of the error are such as to have brought about a situation in which an assumed state of affairs which up to after 5pm on the last date for the lodgement of an Adjudication Response was the only state of affairs known to Reed constructions was overturned either by the Adjudicator concluding that a completely different set of facts applied or alternatively as the result of a submission as to the circumstances by Eire. Eire was not entitled to assert a position different to the one contained in its Adjudication Application, certainly not without a request from the Adjudicator.


The Adjudicator did not prior to the making of his determination, convey to Reed Constructions that he intended to treat the evidence and submissions provided by Eire as amounting to an alteration of the alleged date of service of the Payment Claim. As a result of the conduct of either the Adjudicator or Eire, Reed Constructions was not given the opportunity to address the substantive issues of the Payment Claim in an Adjudication Response.


The failure of the Adjudicator to seek submissions or give Reed Constructions an opportunity to deal with the Adjudication on an altered factual basis was a denial of natural justice: John Goss Projects Pty Ltd v Leighton Contractors Pty Ltd , [2006] NSWSC 798 particularly at [31] and [33] see also Brereton J in Fifty Property Investments v O’Mara [2006] NSWSC 428 at [44] - [45] .

67 In Plaza West Pty Ltd v Simon’s Earthworks (NSW) Pty Ltd & Anor [2008] NSWCA 279 the Court of Appeal was again concerned with what was said to be the error by an adjudicator and a denial of procedural fairness. The Court said at 31 to 37 the following:


31 In my view, the above arguments of the appellant are without substance. The adjudicator, in a meticulous determination, dealt with all relevant arguments. He adjudicated upon the payment claim put forward by s 17(1). He dealt with every submission put to him by the parties. He came to the view that he was not required to examine the payment schedule line by line in answer (as would have been required under s 9(b)) because of his (erroneous on this hypothesis) view of the operation of cl 37(2) and s 9(a).


32 There may have been a legal error but that did not mean that the adjudicator did not fulfil his statutory task in s 22. This is especially so when it is recognised that a legal submission reflected by the cases at [26] above was not put to him. Thus his error was brought about by the way the parties conducted the matter before him. There may be occasions where a tribunal despite dealing with a matter on the basis of the approach taken by the parties can still be seen to have failed to attend to its required task: see, eg, Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186. Here, the adjudicator attended to the task of dealing with the adjudication claim by dealing with the matters required by s 22(2).


33 The second argument put on appeal was to the effect that the adjudicator had failed to afford procedural fairness to the appellant in not dealing with the payment schedule line by line. It was submitted that a failure to deal with submissions put to the adjudicator was a breach of the rules of procedural fairness.


34 The appellant accepted during the course of argument that the operation of this submission was dependent, in substance, upon the success of the first argument. Given that the first argument fails this leads to the failure of this submission. Nevertheless, it is appropriate to make some further comments. There was no failure to afford procedural fairness. The adjudicator attended to all the submissions put by both parties. He came to the view that he did not need to deal with aspects of the submissions of the appellant because of the view (erroneous as I have said) of the operation of cl 37(2) of the contract pursuant to s 9(a). This was not ignoring the submissions of the appellant; it was dealing with them, appropriately on the hypothesis that he worked upon, and from which he was not dissuaded by the submissions of the parties.


35 Reference was made to the case of Firedam Civil Engineering v KJP Constructions [2007] NSWSC 1162. In that case, Austin J concluded that an adjudicator had denied a party procedural fairness by not dealing with its payment schedule on the basis that the payment schedule was served late. The case can be distinguished on the simple basis that here the adjudicator did not disregard the submissions of the appellant. Rather, though he had regard to them, he did not, on the way he approached the matter, have to deal with them in full.


36 Reference was also made to the decision of White J in Reiby Street Apartments v Winterton Constructions [2006] NSWSC 375 where White J also concluded that there had a breach of procedural fairness in disregarding matters put to him in the payment schedule and adjudication response because of mistaken views as to the facts and law. Once again the case can be distinguished on the basis that here the adjudicator did not ignore the submissions.


37 For my part, I would wish to reserve the question as to the correctness of the reasoning (though not necessarily the result) in both Firedam and Reiby Street. If an adjudicator in attending to the task in s 22 comes to the view (mistakenly by reference to the facts or law) that one aspect of the payment schedule does not arise for consideration, it is at best a problematic proposition that the failure to deal with such submissions or such aspects of the payment schedule is a denial of procedural fairness. The appropriate question is to ascertain whether the statutory task laid down for the adjudicator has been complied with. That is not, of course, to say that procedural fairness should not be afforded to the parties in the adjudication.


68 What has happened is that at a time prior to the time for putting in an adjudication response the plaintiff made a decision to raise the question of whether there was a valid adjudication application. An alternative would have been to contend for a later date of service. Such a course was attended with difficulties but could have included the material that had been included in the payment schedule that was served.


69 In their submissions to the adjudicator of 12 December 2008 the plaintiff presumably accepted that their submissions were ones that the adjudicator was obliged to consider under s 22 (2). They expected a response and naturally gave a copy of their submissions to the other side. The adjudicator quite properly accepted the defendant’s submissions on this aspect and it is also plain from his reasons that he accepted and considered the response provided by the plaintiff on 17 December 2008.


70 It seems to me that there is no lack of procedural fairness. It is perfectly plain that the plaintiff made a decision to pursue a particular course rather than another course such as contending for service on 7 November 2008 and the supply of an adjudication response. It may well be that the correct determination of the service question may well have meant that that alternative course may have been unsuccessful. However, it should not be forgotten that the plaintiff’s choice to proceed down its chosen path was one taken during the time within which an adjudication response could have been made.


71 In these circumstances I do not see that there is any denial of natural justice.


72 I dismiss the summons with costs.



22 July 2009