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BUILDING & PROPERTY LAW Full Court had made an error by applying the NSW case of Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No.2). They concluded that the Building and Construction Industry Security of Payment Act 1999 (NSW) prevented judicial review on the ground of error of law on the face of the record. Vadasz “contended that the adjudicator had made no error of law”. 17 The determination as to whether the Acts allowed the issue of judicial review on the ground of error of law on the face of the record, would move to the HCA. Both cases were granted special leave by the HCA. They were enjoined on 12 May, 2017. The hearing was held on 9 November, 2017, adjourned until Tuesday, 14 November, 2017. The HCA handed down the decision on 14 February, 2018. The HCA held in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd 18 : The only question in this appeal is whether the scheme established by the Security of Payment Act for claims for, and payment of, progress payments ousts the jurisdiction of the Supreme Court of New South Wales to make an order in the nature of certiorari to quash a determination by an adjudicator for error of law on the face of the record that is not a jurisdictional error. The answer is yes: the Security of Payment Act does oust that jurisdiction. 19 The HCA further added in Maxcon Constructions Pty Ltd v Vadasz 20 : However, it is important to add that, for the reasons explained in Probuild, the Supreme Court of South Australia may grant relief (whether in the nature of certiorari or otherwise) for jurisdictional error by an adjudicator appointed under the Security of Payment Act; but the provisions of the Security of Payment Act, like the provisions of the New South Wales Act, oust the Supreme Court’s jurisdiction to make an order in the nature of certiorari to quash an adjudicator’s determination for error of law on the face of the record that is not a jurisdictional error. 21 CONCLUSION The decision appears to have been well received by adjudicators. Adjudicators 32 THE BULLETIN September 2019 operate in an environment in which Andrew Wallace termed; “decision is an interim one and given that it is often made in a “pressure cooker” environment under extremely tight timeframes, 22 trying to achieve what Lord Ackner coined in the House of Lords, the ‘quick and dirty fix”. 23 Adjudication requires independence and involves analysis of copious quantities of documentation that make up the application and the response, 24 and has, in most states, 10 business days to make often challenging determinations. To make the issue more complicated, most adjudicators come from the building and construction industry, not lawyers. They usually have backgrounds as civil engineers, project managers, architects, and builders. For example in WA in 2017-18, there were 84 registered adjudicators of which 57 (or 68%) were non-lawyers, and 27 (32%) lawyers. 25 In the NT in 2017-18, there were 42 registered adjudicators of which 25 (or 60%) were non-lawyers, and 17 (40%) lawyers. 26 The HCA rightly recognises that non-lawyer adjudicators may apply the incorrect law, or make incorrect conclusions of the facts presented to them. The HCA concluded in Probuild: 27 The Security of Payment Act did not authorise adjudicators to take unlawful steps by making errors of law. What it did do, by implication based upon a background legislative assumption, was to immunise from judicial review any non-jurisdictional error of law on the face of the record. It is unlikely that those who initially championed security of payment legislation saw adjudication in terms of legal purity as opposed to what Lord Ackner coined in the House of Lords, the “quick and dirty fix”. 28 The former Building Commissioner of Western Australia, Mr Peter Gow affirmed; “The adjudicator may have much more freedom to balance cost and time against legal purity”. 29 Non-jurisdictional error of law on the face of the record “would imply an expectation from the Judiciary that an adjudicator would have the same legal qualifications as a lawyer has.” 30 Had the HCA held differently, Frayne SC would have been further vindicated by his assertion. However, common sense prevailed. The HCA decision confirmed that Fenwick Elliott, was correct; “there is no real immediate prospect of nonjurisdictional error of law sufficing as a ground for challenge under the West Coast model any more than under the East Coast model”. 31 Dr Steensma specialises in Construction Law and ADR. He is an Arbitrator (Gde 3), Adjudicator (WA & NT), Mediator (NMAS), and Expert Determination Practitioner. He has been a member of the Society’s ADR committee since 2017. The Author would also like to thank Professor Philip Evans for his guidance in this paper. B Endnotes 1 Robert Fenwick Elliott, Maxcon in The Shade, (03 Jan 2017), https://feconslaw.wordpress. com/2017/01/03/maxcon-in-the-shade/#_ ftnref2 2 Resolution Institute - SA Chapter CPD - Recent case law affecting adjudication Security of Payment (SOP) Acts in SA and other states, 9 February 2017 in Adelaide. Guest presenter Martin Frayne SC. 3 Robert Fenwick Elliott, ‘10 Days in Utopia’ (Proceedings of the Institute of Arbitrators & Mediators Australia, Glenelg, South Australia, 02 June 2007), 5. 4 Building and Construction Industry Security of Payment Act 1999 (NSW); Building and Construction Industry Security of Payment Act 2002 (Vic); Building and Construction Industry Payments Act 2004 (Qld) (later Building IndustryFairness (Security of Payment) Act 2017 (Qld); Construction Contracts (Security of Payments) Act 2004 (NT); Building and Construction Industry (Security of Payment) Act 2009 (SA); Building and Construction Industry Security of Payment Act 2009 (ACT); Building and Construction Industry Security of Payment Act 2009 (Tas). 5 Peter Butt, et al, LexisNexis – Concise Australian Legal Dictionary, (LexisNexis Butterworths, Chatswood NSW, 4th Ed, 2011), 34. 6 [2016] NSWCA 379. 7 [2017] SASCFC 2. 8 High Court of Australia, ‘Short particulars, Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (S145/2017), http://www. hcourt.gov.au/assets/cases/08-Sydney/s145- 2017/Probuild_SP.pdf, 1. 9 Ibid. 10 High Court of Australia, ‘Short particulars, Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (S145/2017), http://www. hcourt.gov.au/assets/cases/08-Sydney/s145- 2017/Probuild_SP.pdf, 1. 11 Ibid. 12 High Court of Australia, ‘Short particulars, Maxcon Constructions Pty Ltd v Michael Christian
BUILDING & PROPERTY LAW Vadasz (Trading As Australasian Piling Company) & Ors (A17/2017), http://www.hcourt.gov.au/ assets/cases/01-Adelaide/A17-2017/Maxcon_ SP.pdf, 1. 13 Building and Construction Industry Security of Payment Act 2009 (SA), s 12 which states: 12—Effect of “pay when paid” provisions (1) A pay when paid provision of a construction contract has no effect in relation to any payment for construction work carried out or undertaken to be carried out (or for related goods and services supplied or undertaken to be supplied) under the contract. (2) In this section— money owing, in relation to a construction contract, means money owing for construction work carried out or undertaken to be carried out (or for related goods and services supplied or undertaken to be supplied) under the contract; pay when paid provision of a construction contract means a provision of the contract— (a) that makes the liability of 1 party (the first party) to pay money owing to another party (the second party) contingent on payment to the first party by a further party (the third party) of the whole or a part of that money; or (b) that makes the due date for payment of money owing by the first party to the second party dependent on the date on which payment of the whole or a part of that money is made to the first party by the third party; or (c) that otherwise makes the liability to pay money owing, or the due date for payment of money owing, contingent or dependent on the operation of another contract. 14 High Court of Australia, ‘Short particulars, Maxcon Constructions Pty Ltd v Michael Christian Vadasz (Trading As Australasian Piling Company) & Ors (A17/2017), http://www.hcourt.gov.au/ assets/cases/01-Adelaide/A17-2017/Maxcon_ SP.pdf, 1. 15 the Lexus Nexus Concise Australian Legal Dictionary, fourth edition defines ‘certiorari’ as; ‘a type of prerogative remedy issued by a court to bring before it the decision or determination of a tribunal or inferior court to quash it on the ground of nonjurisdictional error of law on the face of the record, or for jurisdictional error or denial of procedural fairness. (p 83). 16 High Court of Australia, ‘Short particulars, Maxcon Constructions Pty Ltd v Michael Christian Vadasz (Trading As Australasian Piling Company) & Ors (A17/2017), http://www.hcourt.gov.au/ assets/cases/01-Adelaide/A17-2017/Maxcon_ SP.pdf, 1. 17 Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 A17/2017, [4]. 18 [2018] HCA 4 (14 February 2018) S145/2017. 19 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4, [2]. 20 HCA 5 (14 February 2018) A17/2017. 21 Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 , A17/2017, [5]. 22 Andrew Wallace, Final Report of the Review of the Discussion Paper – Payment Dispute Resolution in the Queensland Building and Construction Industry (Building Services Authority, 2013), 221. 23 Becky Davey, Upcoming changes to the law applying to construction contracts, (2011), website: 24 In 2014, the author, as an adjudicator to a payment claim dispute, received an application for adjudication that was encumbered by some 23 lever arch folders of A4 and A3 documents. It contained 7977 pages. The total quantum of the submissions by both parties was 34, A4 & A3 size folders, and contained 11906 pages. This is still a record in Western Australia. 25 Government of Western Austrlia, Department of Mines and Industry Regulation and Safety (Building Commission), (2019), Find an adjudicator, website. 26 Government of the Northern Territory - Construction Contracts Registrar, (2019), List of registered adjudicators, website 27 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4, [108]. 28 Becky Davey, Upcoming changes to the law applying to construction contracts, (2011), website: 29 Peter Gow, ‘The Construction Contracts Act in Western Australia’, (2008) The Arbitrator & Mediator, The Institute of Arbitrators & Mediators Australia Vol 27. Number: 2 (Date: Dec 2008), 33. 30 Auke Steensma, ‘A statutory review of adjudicators’ determinations under the Construction Contracts Act 2004 (WA) by the State Administrative Tribunal and the Courts of Western Australia’ (PhD Thesis, Curtin University, 2018), p 291. 31 Robert Fenwick Elliott, Maxcon in The Shade, (03 Jan 2017), https://feconslaw.wordpress. com/2017/01/03/maxcon-in-the-shade/#_ ftnref2 We Are Forensic Experts In • Engineering Analysis & Reconstruction • Traffic Crashes & Road Safety • Workplace or Mining Incidents • Reporting & Experts Court Testimony Delta V Experts • Clarifies the facts in a situation • Scientifically substantiates the evidence • Failure Analysis & Safety Solutions • Physical, Crash, Incident & Vehicle Dynamic Handling Testing DELTA-V EXPERTS • Strengthens your communication • Diverse experience and expertise 03 9481 2200 www.dvexperts.net 9 Springbank Street, Tullamarine, 3043
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