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BUILDING & PROPERTY LAW THE NON-JURISDICTIONAL ERROR OF LAW ON THE FACE OF THE RECORD AND THE CASES BEFORE THE HIGH COURT OF AUSTRALIA DR AUKE STEENSMA, BARRISTER AND SOLICITOR, STEENSMA LAWYERS In January, 2017, Robert Fenwick Elliott, and the author of the seminal work, 10 Days in Utopia, 3 stated that the state Supreme Courts did not have jurisdiction to review the determinations of adjudicators under security of payment (SOP) legislation 4 , relating to non-jurisdictional error of law on the face of the record. The statement has created considerable controversy for counsel and legal practitioners. The Lexus Nexus Concise Australian Legal Dictionary, defines “error of law on the face of the record” as; “a ground of judicial review available where a nonjurisdictional error appears on the face of the record of an inferior court.” 5 As Fenwick Elliot noted, two cases considered by the High Court of Australia (HCA) to determine if the security of payment (SOP) legislation would bar judicial review on the grounds of an error of law on the face of the record. On 14 February, 2018, Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ of the HCA, dismissed two appeals that came from the enjoined cases from NSW; Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor, 6 and the 30 THE BULLETIN <strong>September</strong> <strong>2019</strong> other; Maxcon Constructions Pty Ltd v Vadasz (No 2), 7 from South Australia. Probuild concerned a payment claim submitted by Shade. After rejection by Probuild the claim progressed to adjudication. The adjudicator determined in favour of Shade. Probuild later alleged a denial of procedural fairness, and that an error of law in the determination was made by the adjudicator. At first instance primary Judge, Emmett J, held that “the Court’s supervisory jurisdiction permitted a review of nonjurisdictional errors of law on the face of the record” 8 and the determination. Shade appealed. They argued “that there was no power to intervene in a case where the only errors identified were non-jurisdictional errors of law.” 9 On 23 December, 2016, Bathurst CJ, Beazley P, Basten, Macfarlan & Leeming JJA, of the NSW Supreme Court Court of Appeal handed down their judgement. They held unanimously that “the Security of Payment Act did not permit a review of an adjudicator’s decision other than for jurisdictional error.” 10 Probuild then sought leave to appeal in the HCA claiming: The NSW Court of Appeal erred in holding that the NSW Supreme Court’s power to make orders in the nature of certiorari for error of law on the face of the record is ousted in relation to determinations under the Security of Payment Act. 11 Two months later, the Full Court of the Supreme Court of South Australia, dismissed an appeal sought by Maxcon Constructions Pty Ltd v Vadasz (No 2) (2017) 127 SASR 193. The case related to a payment claim against Maxcon, determined in favour, of one Vadasz. The contract was for the “design and construct piling for an apartment building.” 12 However, unbeknown to Maxcon, at the time of the contract agreement, Mr Vadasz was an undischarged bankrupt. The adjudicator concluded that the contract between Maxcon and Vadasz included retention provisions that the adjudicator determined were “pay when pay provisions”. The adjudicator found that the retention provisions were prohibited pursuant to s 12(1) and s 12(2) (c) of the Building and Construction Industry Security of Payment Act 2009 (SA). 13 The adjudicator held the provisions as void,
BUILDING & PROPERTY LAW There is no real immediate prospect of non-jurisdictional error of law sufficing as a ground for challenge under the West Coast model any more than the East Coast model. Construction Law Barrister Robert Fenwick Elliott 3 January 2017 1 Being an adjudicator under the Building and Construction Industry Security of Payment Act 2009 (SA) is like walking around with a target on your back. Construction Law Barrister Martin Frayne SC 9 February 2017 2 and therefore, Maxcon did not have an entitlement to the retention sum. Maxcon initiated proceedings in the Supreme Court of South Australia. Stanley J held “that there was no jurisdictional error (or other error of law) made by the adjudicator.” 14 Maxcon then commenced an Appeal before the Full Court of the South Australian Supreme Court. The Full Court quorum consisting of; Blue J, Lovell JJ and Hinton J, dismissed the appeal (with Hinton J dissenting). The Full Court held that there was no jurisdictional error. It held that there had been an error, but that error was an error of law on the face of the record. They held that the authority for “proposition that the remedy of certiorari 15 was impliedly excluded under the Act”. 16 Maxcon then appealed. The appeal was made on the following ground: that the • Mediation • Conciliation • Dispute Representation • Mediation Advocacy • Collaborative Law Contact Stephen Dickinson (LLB (Hons), NMAS Accredited Mediator) E stephen@ansr.com.au M 0414 456 474 Or visit ansr.com.au for all matter and client enquiries
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