SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: St Hilliers Property Pty Limited v ACT Projects Pty Ltd and Simon Wilson

Citation: [2017] ACTSC 177

Hearing Dates: 11 March 2016, 19 April 2016 and 26 May 2016, submissions received 31 May 2017.

Decision Date: Thursday 20 July 2017

Before: Walmsley AJ

Decision: See [235]–[244]

Catchwords: CONTRACTS – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – Building, Engineering And Related Contracts – Remuneration – statutory regulation of entitlement to and recovery of progress payments – Building and Construction Industry (Security of Payment) Act 2009 (ACT) – payment claims – whether a payment claim had been served too late – whether a ‘reference date’ was a necessary prerequisite to its service, and was absent at the time of service – whether an adjudicator had delegated the preparation of his adjudication by having someone else prepare it

ADMINISTRATIVE LAW – JUDICIAL REVIEW – Application For Leave To Appeal From Adjudication Decision Under The Building and Construction Industry (Security of Payment) Act 2009 (ACT) – Whether an adjudicator’s finding of waiver had been an error at law

Legislation Cited: Building and Construction Industry (Security of Payment) Act 2009 (ACT)

Administrative Decisions (Judicial review) Act 1989 (ACT)

Cases Cited: ABB Power Plants Ltd v Electricity Commission of New South Wales t/as Pacific Power (1995) 35 NSWLR 596

Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570

Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; 78 NSWLR 393

Dilosa v Latec Finance Pty Ltd (1968) 84 WN (NSW) Pt 1 557

Fernando v Medical Complaints Tribunal [2007] TASSC 44; 16 TAS R 237

Fulton Hogan Construction Pty Ltd v Brady Marine and Civil Pty Ltd [2015] ACTSC 384

Laing O’Rourke v H and M [2010] NSWSC 818

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985) 162

CLR 24

Minister for Local Government v South Sydney City Council [2002] NSWCA 288; 55 NSWLR 381

O’Reilly v The Commissioners of the State Bank of Victoria (1982) 153 CLR 1

Pines Living Pty Limited v John O’Brien & Walton Construction Pty Limited [2013] ACTSC 156

R v Wallis (1949) 78 CLR 529 at 550

Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd & Ors [2016] HCA 52; 91 ALJR 233

Tickner v Chapman (1995) 57 FCR 451

Thompson v Palmer (1933) 49 CLR 507

Parties: St Hilliers Property Pty Ltd (Appellant)

ACT Projects Pty Ltd (First Respondent)

Simon Wilson (Second Respondent)

Representation: CounselMr D T Miller SC and Mr M Sheldon (Appellant)

Mr J T Moffett (First Respondent)

Mr M Orlov (Second Respondent)

SolicitorsCollin Biggers & Paisley (Appellant)

Bradley Allen Love (First Respondent)

CCS Legal Pty Ltd (Second Respondent)

File Numbers: SCA 59 of 2016

SC 363 of 2016

Walmsley AJ:

Background to the Act

1. This litigation arises under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (the Act).

2. The Act provides a simple mechanism for a subcontractor to recover sums it claims are due. A payment claim, resembling a progress claim, is served on the contractor. If the claim is not paid in 10 business days (or such other time as the contract may specify) and there is not in that period some objection notified to the subcontractor, the claim may be registered in a court and enforced as a judgment. If the contractor disputes a claim in part or whole, it must serve a schedule, called a payment schedule, saying what if any payment it proposes to make and why, if the amount is less than claimed, it proposes to pay less (s 16).

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3. When the contractor disputes a payment claim, the subcontractor may ask an authorised nominating authority to appoint an adjudicator, to adjudicate on the claim (s 19). Those who are eligible to act as adjudicators may, if nominated for a job by an authorised nominating authority, accept the appointment, or decline it. An adjudicator will only be appointed if he or she gives notice of acceptance of the appointment to the parties to the dispute (s 21(1)). An adjudicator not wishing to take a job may simply ignore a nomination, and decline to lodge a notice of acceptance.

4. When an adjudicator accepts an appointment to adjudicate, the contractor may respond to the application (adjudication response) by putting its position to the adjudicator (s 22).

5. The adjudicator must then deliver his or her determination promptly, and in accordance with a strict time table (s 23).

6. If the adjudicator decides money is payable by the contractor, the money must be paid not later than five business days after the day the decision is made, or by such other day as the adjudicator decides (s 25(b)).

7. Where money is not paid on time, the subcontractor may obtain a certificate, called an adjudication certificate, from the authorised nominating authority (s 26) and file it in a court, where it may be enforced as a judgment debt (s 27(1)).

8. A contractor may apply to the court in which the certificate is registered to set it aside, but if that happens, it must pay into court as security the unpaid part of the adjudicated amount pending the court’s decision (s 27(4)(b).

History of the dispute

9. On or about the 9 July 2014 a subcontractor called ACT Projects, contracted to perform structural works for St Hilliers on a project called the Common Ground Project, in the Canberra suburb of Gungahlin.

10. Work on the project was completed before 29 April 2015. Between 20 May 2015 and 20 April 2016 ACT Projects served 12 separate but almost identical payment claims on St Hilliers. Each related to the same completed works.

11. Each time one of these payment claims was served, St Hilliers responded by issuing a payment schedule, in which it assessed the amount it owed as nil. On the first twelve occasions that occurred, ACT Projects took its claim no further, and did not request an adjudication.

12. Eventually however ACT Projects moved to activate one of its claims. Its thirteenth claim was served on 20 May 2016. As its predecessors had done, this one also related to work done before 29 April 2015.

13. As it had done for each of this claim’s predecessors, St Hilliers served a payment schedule, assessing the amount payable by it as nil.

14. On 20 June 2016 ACT Projects lodged an adjudication application with an eligible nominating authority, Adjudicate Today Pty Limited. (ATPL). ATPL nominated the second defendant, Mr Simon Wilson, (Mr Wilson) as the adjudicator.

15. On 27 June 2016 Mr Wilson filed notice of his acceptance of the role of adjudicator.

16. On 4 July 2016 St Hilliers lodged its adjudication response.

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17. On 8 July 2016 Mr Wilson asked for more submissions from the parties. ACT Projects lodged its submissions on 11 July 2016, and St Hilliers lodged its submissions on 13 July 2016.

18. On 15 July 2016 Mr Wilson asked for a five business day extension of time to make his adjudication. Both parties agreed he should have that time. So (this was agreed between the parties) the adjudication had to be made on or by 22 July 2016.

19. Although the plaintiff does not accept this, Mr Wilson says he made his determination within time. He did make some amendments on 25 July, but they were minor, and he says it was open to him to do that, and the changes did not affect the argument that his determination was made in time.

20. Mr Wilson determined that St Hilliers owed ACT Projects $222,260.53.

21. St Hilliers then commenced proceedings to set aside the adjudication, paying into court $222,260.53.

22. There are two sets of proceedings on foot. In the first, St Hilliers seeks judicial review of the determination, under the Administrative Decisions (Judicial review) Act 1989 (ACT) (‘ADJR Act’). In the second, it appeals from the determination on the basis of error of law. Both matters were heard together, with the evidence in one being treated as evidence in the other.

23. Mr Wilson took an active role in this litigation. Because of his active role, St Hilliers submitted that if its claim to set aside the determination succeeds, any costs order in its favour should be made against Mr Wilson as well as against ACT Projects: Fernando v Medical Complaints Tribunal [2007] TASSC 44; 16 TAS R 237.

24. Although in its application St Hilliers asserted the repetitious submission of payment claims amounted to an abuse of process, Mr D T Miller SC, who with Mr M Sheldon appeared for the plaintiff, informed me that St Hilliers no longer sought that order.

The ADJR application

25. On its application for review, St Hilliers sought to attack the determination on three separate grounds, that the payment claim had been served too late, that a date called a ‘reference date’ was a necessary prerequisite to its service, and was absent at the time of service, and that Mr Wilson had, in effect, delegated the preparation of his adjudication by having someone else prepare it, a course not permitted by the Act.

Was the payment claim served too late?

26. The Act has strict requirements for when payment claims may be served.

27. Section 15(4) provides:

(4) A payment claim may be given only before the later of—

(a) the end of the period worked out under the construction contract; and

(b) the end of the period of 12 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied.

28. It was agreed between the parties that the last construction work on the site of any kind occurred on or before 29 April 2015. So the application for determination was lodged on 20 May 2016, more than 12 months after the period permitted by s 15(4)(b).

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29. In those circumstances St Hilliers submitted ACT Projects had been out of time with its payment claim. It could no longer rely on s 15(4)(b), and any period which could be worked out under the contract had long passed, so s 15(4)(a) did not apply either.

30. However, when making its submissions to Mr Wilson, ACT Projects relied on s 15(4)(a), asserting cl 16.9 of the contract permitted the claim to be served when it was. Mr Wilson accepted that submission.

31. In his adjudication, Mr Wilson said:

“36 In my opinion, the Subcontract contemplated/provided for the submission of Payment Claims in the period between Substantial Completion and the Final Progress Payment process provided for in Clause 16.9.

37 …

38 Clause 16.8 expressly provides for the Respondent to withhold monies, before or after Substantial Completion, for defective or incomplete work. In this instance, the Respondent appears to have engaged other [sic] to complete the incomplete work and to rectify the defective work.

39 If the Subcontractor / Claimant had completed the incomplete work or rectified the defective work after Substantial Completion, the Claimant must have been entitled to submit a Payment Claim for the amounts withheld against those items at any time until the end of the period prescribed in Clause 16.9. Any provision, express or implied, that purported to invalidate such a Payment Claim, due to the unavailability of a reference date, would be void, pursuant to s 42 of the Act.

40 Clause 16.9 also contemplates submission of Payment Claims at any time, including the period after Substantial Completion until the end of the period prescribed in Clause 16.9…

41 The Payment Claims could include claims for the completion [of] defective or incomplete work that existed at the time of Substantial Completion. Clause 16.9 provides for the Subcontractor (Claimant) to make payment claims up to a final payment claim and the period within which that might occur extends at least until the end of the Defects Liability Period. I note that Section 10(2) of the Act includes a final payment within the definition of progress payment.

42 …

43 …

44 In my opinion, the Contract provides for a period in which a payment claim may be given, the end of which may be worked out under the Contract. That period will end at or around the time of the final payment claim.

45 Because Section 15(4)(a) of the Act applies, the end of the relevant period will be in the order of 6 months later than the end of a period determined under Section 15(4)(b).”

32. St Hilliers submitted to me that Mr Wilson had misconstrued the contract.

33. Clause 16.9 provided relevantly:

Subcontract Value Agreement (CVA)

16.9 The subcontractor agrees to execute a CVA containing confirmation of the matters dealt with in Schedule G and a release in favour of St Hilliers as a precondition of final payment to the Subcontractor. The Unpaid Substantial Completion Retention Release amount identified in the CVA is payable on Substantial Completion and the Unpaid Final Retention Release amount is payable at the end of the Defects Liability Period or when all defects have been remedied to St Hilliers’ satisfaction, whichever is the later. Any Payment Claim which the Subcontractor may have which is not included in the CVA or notified in writing to St Hilliers within 7 days of issue of the CVA or notified in writing to St Hilliers within 3 business days of the commencement of the events giving rise to the Claim

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(whichever is the earlier) (other than any claim for the return of Security or Retention) shall be absolutely barred and forever released and discharged. Nothing in this clause shall restrict the Subcontractor from defending or bringing a cross claim (provided the cross claim related to the subject matter of the claim against the Subcontractor) or a claim for contribution with respect to, any claim, action, suit of proceeding [sic] brought by the Head Contract Principal against the Subcontractor. (The part underlined was particularly relied on by Mr Wilson).

34. At page 148 of the contract, “CVA” is said to mean a “subcontract value agreement”. The contract does not otherwise say what that expression means.

35. In their written submissions of the 12 September 2016, counsel for St Hilliers submitted inter alia (references to the BCISP Act are to the Act):

15 It is a necessary precondition to enliven the jurisdiction of an adjudicator that a payment claim be served within the time mandated by section 15(4) of the BCISP Act.1 The question of whether the payment claim was served within time is a jurisdictional fact.

16 Section 15(4) of the BCISP Act provides that a payment claim may be given only before the later of:

(a) the end of the period worked out under the construction contract; and

(b) the end of the period of 12 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied.

17 At [20] - [46] of the Determination, the Adjudicator considered whether the Payment Claim was given in the time required under section 15(4) of the BCISP Act. 2 There the Adjudicator determined that clause 15(4)(a) of the BCISP Act was the operative provision. He reasoned that this was so because clause 16.9 of the Contract provided for an end period (worked out under the construction contract) which was later than the period defined in section 15(4)(b) of the BCISP Act.3 The Adjudicator did not make an express finding as to the last date on which the Payment Claim could have been given for the purposes of s.15(4)(a), but determined that the Payment Claim was made in time and therefore that his jurisdiction was enlivened.4

18 The Adjudicator’s decision that section 15(4)(a) of the BCISP Act provided the relevant last date for the giving of a payment claim was, with respect, wrong.

19 Contrary to the Adjudicator’s decision, clause 16.9 of the Contract does not provide for an end period for the giving of a payment claim which is later than the period in section 15(4)(b) of the BCISP Act, being 12 months after the construction work to which the claim relates was last carried out.

20 …

21 The first sentence of clause 16.9 requires ACT Projects to execute a Subcontract Value Agreement (being the usual sort of statement and release given by a subcontractor on completion) as a precondition to receipt of final payment. The first sentence says nothing about the last date for ACT Projects to give a payment claim under the Contract, or the BCISP Act.

22 The second sentence deals with the release of retention monies. Again, that sentence says nothing about the last date for ACT Projects to give a payment claim under the Contract, or the BCISP Act.

1 Winyu Pty Ltd v King & Anor [2015] ACTSC 387 at [4]; Bauen Constructions Pty Ltd v Sky General Services Pty Ltd [2012] NSWSC 1123 at [36]- [55].2 Tab 12, pp.310-315 of Exhibit JC-1.3 Tab 12, pp.315 [44] – [45] of Exhibit JC-1.4 Tab 12, pp.315 [46] of Exhibit JC-1.

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23 The third sentence starts with the words “Any Payment Claim which the Subcontractor may have…”. It is clear from these words that for the third sentence to operate, ACT Projects must have an existing right to make a payment claim. The sentence does not bestow any right of itself to make one (again, under either the Contract or the BCISP Act). That sentence speaks of restriction, not entitlement.

24 The third sentence then continues to require (lest any entitlement otherwise arising be lost) that any such claim to be given “(whichever is the earlier)” of three contractual milestones, being “…the CVA or … within 7 days of issue of the CVA or … within 3 business days of the commencement of the events giving rise to the Claim”.

25 In the context of the subject Payment Claim, the earliest of those three dates must be three days after the time for the giving of the Payment Claim under clause 16.1, being 20 May 2015. That is because the CVA (being the trigger for the other two dates) could not occur until after Substantial Completion.

26 It follows that no part of cl.16.9 dictates a relevant last date for claim in any way operative for the subject works. Section 15(4)(a) of the BCISP Act is not engaged. This threshold point stood to be assessed under s.15(4)(b). The inquiry was thus, was some of the work for which payment was claimed in the payment claim performed in the period of 12 months prior to the claim being lodged?5 The answer in this instance was ‘no’. The last date to give a payment claim referrable to work completed under the Contract on 29 April 2015 was 29 April 2016.6 The Payment Claim was given on 20 May 2016. It was accordingly made out of time. The Adjudicator did not have jurisdiction to make the Determination.

36. Before me Mr Miller submitted that the part of cl 16.9 relied on by Mr Wilson is merely a provision which bars certain conduct, rather than one which creates rights.

37. For ACT Projects, Mr Moffett submitted Mr Wilson had been correct in finding jurisdiction under cl 16.9.

38. Mr Moffett argued that “later of” in s 15(4) for the purpose of these proceedings referred to “the end of the period worked out under the construction contract”. He submitted the contract contained a provision which permitted a period to be found which had not expired by the time the payment claim was served. That provision, he submitted, was cl 16.1.

39. Clause 16.1 provides:

Providing the Subcontractor is not in breach of any term of this Subcontract, the Subcontractor is entitled to submit one Payment Claim per calendar month on the date on which it meets the requirements of clause 16.2 (reference date), provided that the reference date shall be no later than the date of the month for ‘Payment Claim Timing’ nominated in the Key Terms, or if that is not a Business Day, no later than the previous Business Day. Payment Claims shall be lodged in the manner set out in Schedule J”.

40. Mr Moffett also submitted that no other clause in the contract limits or prohibits his client from submitting payment claims up to the time of the Final Payment Claim process under cl 16.9.

41. He submitted that the plaintiff had not yet provided for “Substantial Completion” of the “Works”. It must follow, then, that the contract contains a period when payment claims can and will continue to accrue up to at least the time the “final payment” is made under cl 16.9. He submitted that as a “final payment” had not yet been made, section 15(4)(a) applies, and the payment claim had been served in time.

5 See Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Ltd [2004] NSWCA 393; (2004) 61 NSWLR 515 at [11] and [21] per Hodgson JA – cited by Mossop AsJ in Winyu Pty Ltd v King, op cit.6 It not being disputed that this was the last date when work was carried out on site by the subcontractor: see [27c] of the Adjudication Determination.

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Consideration

42. I consider the adjudicator erred in finding in cl 16.9 a period within which ACT Projects could serve its claim.

43. I cannot see any way in which it shows “the end of the period worked out under the construction contract.”

44. First, the clause says ACT Projects agrees to sign an agreement. Secondly, it provides what is to happen with the retention sum referred to in that agreement. Thirdly, it bars certain payment claims. Fourthly, it preserves to ACT Projects the right to defend or cross claim in any case brought against it by the head contractor.

45. Nowhere does it create any rights to serve payment claims. Nowhere does it contain a mechanism to work out “the end of the period under the construction contract”.

46. The argument for ACT Projects in essence is: in this contract, there will come a time when a final payment is due. That time has not yet arrived. But there is a period, dating from when the contract was made, extending to that as yet unascertained time in the future, when that final payment will be made. During that, as yet undetermined time, the subcontractor is at liberty to serve a payment claim.

47. However, putting aside my observation in [44] above, I cannot see how that submission can be correct, given there is no definite last date for service.

48. I consider the first defendant’s argument involves a misreading of cl 16.9.

49. The words “worked out” where used in s 15(4)(a) suggest one is required to see if the contract contains a mechanism showing a date or some dates for the service of a claim or some claims. But as I have observed, cl 16.9 has no such mechanism. Although Mr Moffett sought assistance from cl 16.1, I do not consider it assists. It merely says how often payment claims may be made.

50. As I am satisfied the payment claim was served too late, the determination should be set aside.

The Reference Date argument

51. St Hilliers submitted there was a further reason the payment claim was out of time.

52. In Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd & Ors [2016] HCA 52; 91 ALJR 233 at [61], the High Court held that the existence of a reference date is a precondition for the making of a valid payment claim under the Act.

53. The parties agreed that I am bound to apply Southern Han if I find there was no reference date available when the payment claim was served.

54. St Hilliers submitted to me that when the payment claim was served, it was not lodged on a reference date, so the claim was invalid. The background to St Hilliers’ argument is as follows.

55. The Act proceeds on the assumption that a subcontractor’s claim for a progress payment may only be served on particular days, called reference dates. St Hilliers submitted that ACT Projects had served its payment claim on a day which was not a reference date, and that ACT Projects had in fact used up all of its available reference dates by the time it had served this claim.

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56. Mr Miller referred me to s 10 of the Act which is as follows:

10 Right to progress payments(1) On and from each reference date under a construction contract, a person is

entitled to a payment (a progress payment) if the person has undertaken, under the contract, to—

(a) carry out construction work; or

(b) supply related goods and services.

(2) A progress payment may include—

(a) the final payment for construction work carried out, or for related goods and services supplied, under a construction contract; or

(b) a single or one-off payment for carrying out construction work, or for supplying related goods and services, under a construction contract; or

(c) a milestone payment.

(3) In this section—

milestone payment means a payment that is based on an event or date.

reference date, for a construction contract, means—

(a) a date stated in, or worked out under, the contract as the date when a claim for a progress payment is to be made in relation to work carried out or undertaken to be carried out, or related goods and services supplied or undertaken to be supplied, under the contract; or

(b) if the contract does not provide a date mentioned in paragraph (a)—

(i) the last day of the calendar month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract; and

(ii) the last day of each subsequent named month.

57. It is to be recalled that Clause 16.1 says:

Providing the Subcontractor is not in breach of any term of this Subcontract, the Subcontractor is entitled to submit one Payment Claim per calendar month on the date on which it meets the requirements of clause 16.2 (reference date), provided that the reference date shall be no later than the date of the month for ‘Payment Claim Timing’ nominated in the Key Terms, or if that is not a Business Day, no later than the previous Business Day. Payment Claims shall be lodged in the manner set out in Schedule J”.

58. Schedule J says:

“Payment Claims to be submitted on the 20th of each month, or the closest previous working day prior…”

59. Thus the contract gave ACT Projects one payment claim day per month, being the 20 th

of each month.

60. It is to be recalled that the adjudicator determined that 20 May 2016 was an available reference date for ACT Projects to lodge its last claim, and that no work of any kind on the site took place after 29 April 2015.

61. St Hilliers argued that 20 May 2016 had not been an available reference date, so the claim was lodged too late, and in finding to the contrary the adjudicator fell into error.

62. The following extracts from St Hilliers’ written submissions of 12 September 2016 set out their primary argument on this issue:

40 [T]he Adjudicator reasoned that:

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(a) he had previously found that ACT Projects may make payment claims up until the time of executing the CVA, or at least until the final payment claim;7

(b) on the proper construction of the Contract there is no requirement for even part of the work to be performed in the month immediately prior as a precondition to an available reference date;8

(c) a plain reading of the Contract is to the effect that reference dates continue to occur on the 20th day of each month until around the time of a final claim;9 with the consequence that,

(d) 20 May 2016 was therefore available as a reference date.10

41 The Adjudicator’s complete failure to reference any contractual provisions in forming his view as to the proper construction of the Contract is surprising. It is unclear what provisions the Adjudicator relied on. Certainly, he could not have relied on the relevant clause for determining reference dates (clause 16), because contrary to the Adjudicator’s finding, clause 16 establishes a regime whereby once a reference date is used, no further reference dates accrue unless new work is performed. To that end:

a. Clause 16.1 of the Contract provides “the Subcontractor is entitled to submit one Payment Claim per calendar month.”.

b. Under clause 16.4 of the Contract, where “…the Subcontractor fails to lodge the Payment Claim…by the reference date… The Subcontractor’s entitlement to submit a Payment Claim for that calendar month lapses and will not arise again until the following reference date…”. It is only in a situation where a payment claim has lapsed under clause 16.4 of the Contract the contract allows for “The Payment Claim submitted in relation to the following reference date may include the amount the subject of the lapsed claim…”.

42 An express contractual right to include amounts included in previous payment claims does not exist where a valid payment claim was lodged on a previous reference date. According to ordinary principles of contractual interpretation, if authority is given in a contract to expressly do something upon a defined condition (in this case, the failure to submit a payment claim in one month), it is to be inferred that there is no authority to do something (in this case, make a claim for work the subject of a previous payment claim) on the happening of other conditions.11

43 Accordingly, on the proper construction of this contract, a (new) reference date can only ever accrue in a month where no construction work was performed, in circumstances where a valid payment claim was not submitted in the previous month (and construction work was done in that earlier month). Where a valid payment claim was submitted in the previous month, no new reference date can arise. This is because there is no work under the Contract which can be claimed. For that reason, on a proper construction of the Contract, the Payment Claim was submitted in relation to the same reference date as all previous 12 payment claims. No new reference date ever arose for those subsequent months, as with the last one.

44 The Payment Claim was therefore given in contravention of section 15(5) of the BCISP Act and is invalid.

63. Clause 16.2 contains preconditions requiring various documents to be attached to a payment claim, and cl 16.3(a) says:

“Payment claim must include:

7 Tab 12, p.319 of Exhibit JC-1, Determination at [69].8 Tab 12, p.319 of Exhibit JC-1, Determination at [70].9 Tab 12, p.319 of Exhibit JC-1, Determination at [71].10 Tab 12, p.319 of Exhibit JC-1, Determination at [76].11 R v Wallis (1949) 78 CLR 529 at 550; cited with approval in ABB Power Plants Ltd v Electricity Commission (NSW) (t/a Pacific Power) (1995) 35 NSWLR 596 at 599D.

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(a) details of the value of the Subcontractor’s Activities carried out by the Subcontractor on site and off site to that time.” (my emphases)

64. Clause 16.4 provides relevantly:

If the Subcontractor fails to lodge the Payment Claim and/or satisfy the pre-conditions for the making of a Payment Claim set out above by the reference date, then the Payment Claim is not valid … The Payment Claim submitted in relation to the following reference date may include the amount the subject of the lapsed claim as well as the amount relating to the following reference date.

65. Mr Miller queried whether “to that time” in cl 16.3(a) meant the reference date, or the time the subcontractor might decide to put in a payment claim. He submitted the former must be the correct construction, and that ACT Projects had been obliged to include the value of work done by it up to that time.

66. He argued cl 16 established a regime where, once a reference date had been used, no further reference dates could accrue unless new work had been performed. An express contractual right to include sums included in past claims could not exist where a valid payment claim had been lodged on a previous reference date, he said.

67. He argued that if express authority is given by a contract to do something, such as submit one payment claim in one month, it ought be inferred there is no contractual authority to do something additional, such as making a claim for work the subject of a previous claim, on the happening of other conditions: R v Wallis (1949) 78 CLR 529 at 550, cited with approval in ABB Power Plants Ltd v Electricity Commission of New South Wales t/as Pacific Power (1995) 35 NSWLR 596 at 599D.

68. He submitted a new reference date could only accrue in a month when no construction work had been done if a valid payment claim had not been submitted in the previous month but where work had been done in that previous month.

69. Mr Moffett submitted there was no need for any work to have been carried out in the month immediately prior to lodgement of a payment claim.

70. He submitted the words “to the time” in cl 16.3(a) must mean the time at which the payment claim is submitted. Thus ACT Projects had been ‘entitled’ to submit a payment claim on a monthly basis so long as the specific requirements under Clause 16.1 had been complied with.

71. He accepted that the existence of a reference date is reviewable, and that absence of a reference date would mean the adjudicator lacked jurisdiction, but submitted the 20 May 2016 had been an available reference date.

72. Mr Moffett also submitted Pines Living Pty Limited v John O’Brien & Walton Construction Pty Limited [2013] ACTSC 156 supported his client’s position that sections 15(5) and (6) when read together, give support for his client’s position.

73. In reply Mr Miller submitted ACT Projects had not grappled with his submission that cl 16.4 prevents any further reference date from arising in circumstances where a valid payment claim for the relevant work had already been submitted.

74. He submitted ACT Projects cannot rely on cl 16.3(a) as it merely deals with the content of a payment claim and does not of itself create a fresh reference date or give a subcontractor any right to submit a payment claim: Clause 16.3(a) operates only when such a right already exists. The right to submit a payment claim remains subject to the limitation in cl 16.4.

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75. As to Mr Moffett’s argument concerning s 15 sub-ss (5) and (6) of the Act, Mr Miller submitted that nothing St Hilliers said turns on the interaction between those subsections.

Consideration

76. I accept the plaintiff’s submissions on this issue.

77. Clause 16.1, although permitting monthly claims, must be construed as having limits to its operation, including time limits. For example it would be absurd to construe it as having continuous operation, beyond the end of construction and payment of the final payment.

78. If, as I am satisfied it does, the clause has a time limit for its operation, that must have been, at the latest, to the time for claiming a final payment.

79. On its face the clause contemplates ongoing work occurring in the month immediately before lodgement, unless a claim previously lodged had failed to comply with relevant preconditions: see cl 16.4. Where there has been such a failure, another claim could be lodged for the work in that claim, which in cl 16.4 is called a “lapsed claim.”

80. It was not suggested here the claim lodged on 20 May 2016 was such a claim.

81. Thus in the context of this case, I accept Mr Miller’s submission that the words “to that time” in cl 16.3(a) must mean to the date immediately before the lodgement of the claim. As no work was done in the month before 20 May 2016, the claim was not served on a reference date, and was invalid.

82. I do not see that Mr Moffett’s submission concerning ss 15(5) and 15(6) assists his argument. Those subsections are consistent with the contract’s regime for the service of one claim per month with an exception for a “lapsed claim”.

Did the adjudicator impermissibly delegate his task?

83. Mr Miller argued that Mr Wilson lacked jurisdiction when purporting to make his adjudication, as he impermissibly delegated his function, in the process, considering material it was not open to him to consider.

84. The background to the submission was that when he was asked to act as an adjudicator Mr Wilson’s adjudication business was very busy, and that when he received this assignment, instead of doing it himself, as the Act contemplated, he asked another adjudicator, Mr Turner to do the job for him.

85. Then when, as he did, Mr Turner prepared a draft adjudication, (the draft) containing many expressions of view and draft findings about matters in issue, Mr Wilson took it into account and incorporated it in his own adjudication, which he inappropriately put forward as all his own work. Such a course was forbidden by s 24(2) of the Act, which is quite explicit about what an adjudicator may consider, documents such as that prepared by Mr Turner not being within the contemplation of s 24(2).

86. Section 24(2) provides:

(2) In deciding an adjudication application, the adjudicator must only consider the following:

(a) this Act;

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(b) the construction contract to which the application relates;

(c) the payment claim to which the application relates, together with any submission, including relevant documentation, properly made by the claimant in support of the claim;

(d) the adjudication application;

(e) the payment schedule, if any, to which the application relates, together with any submission, including relevant documentation, properly made by the respondent in support of the schedule;

(f) the adjudication response, if any;

(g) the result of any inspection by the adjudicator of any matter related to the claim.

87. Mr Miller submitted the parties were entitled to assume Mr Wilson would comply with s 24(2). If they had known he would get someone else to draft his determination, they should have had an opportunity to make submissions to that other person. As they did not have that opportunity, there was procedural unfairness.

88. Mr Miller conceded an adjudicator may obtain help of a limited kind, but said what had occurred here was an extreme example, where Mr Wilson had, in effect, asked another adjudicator to do his job for him and then adopted it as his own.

89. Mr Wilson did not accept that the determination ultimately put forward as his own was not his.

90. He maintained that although he had had help from Mr Turner, he had been entitled to do that, and although he had adapted Mr Turner’s draft as his own, he personally had applied his mind to every issue in it. In the course of giving evidence when being cross examined, he described how he had had discussions with Mr Turner, and how each of them had made changes to the draft until eventually he had put it forward as his own document.

91. When he was cross examined Mr Wilson said the only primary documents kept by him were time sheets. According to his evidence, which on this issue I accept, his office prepared these daily. There were no diary entries or notes setting out the contents of any of his meetings or discussions with Mr Turner.

92. According to available time sheets, before Mr Wilson took over the draft determination and adapted it and put it forward as his own, Mr Turner had done 40 or more hours of work on it. The time sheets also show that approximately half of the billable hours spent in creating the document Mr Wilson ultimately put forward as his adjudication, were by Mr Turner.

93. In evidence was a draft determination prepared by Mr Turner as at 18 July 2016, with amendments later made by Mr Wilson. From this document it is possible to see many of the respective contributions by each of Mr Wilson and Mr Turner, but not all of their contributions.

94. In the course of the hearing, that document was referred to as one ‘frozen in time’ as at 18 July 2016. (‘FIT document’).

95. Mr Wilson said of the FIT document:

Q: So to be clear the … [FIT document] … which is of a comparison between [your] completed version as at around 25 July with 18 July, a frozen in time one, is effectively comparing the document that was produced by Mr Turner then comparing it with the final

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version of the document that had your hand in it and possibly also Mr Turner’s hand again in it after 18 July. Is that right?

A: Correct.

96. Mr Wilson said what was not amended or added by Mr Wilson on the FIT document had been Mr Turner’s work. He also said that some amendments or additions were made to it once the two men had started working together on it but he could not say by whom some of these had been made.

97. The process he followed, he said, after he and Mr Turner had started discussing the draft, had been this:

“Mr Turner would come in, he would brief me on the factual background, we would discuss the issues, we would decide what the determined issue was, and I would direct him with regard to the decision on every single claim sequentially.”

98. When Mr Wilson’s attention was focused on parts of the FIT document where Mr Turner had set out conclusions, such as “Not proved”, against certain items, he maintained Mr Turner had merely inserted these as tentative conclusions for him, and it had been he, Mr Wilson, who had made the decisions.

99. A particularly significant part of ACT Project’s claim concerned variations to the contract. Mr Turner did a great deal of work on the variation claims when preparing his draft.

100. Mr Wilson at [17] of his affidavit of 10 April 2017 said of this work:

“At my request Turner produced a Table of Disputed Variations Claims…. Over the course of the following days between 19 and 21 July 2016, Turner and I discussed each of the major variation claims and I gave directions as to how each claim should be determined….”

101. In his draft, when dealing with the variation claims, Mr Turner used expressions such as “I decide…”([178] , [193], [202] and [213] and “I find…” [212] of the FIT document).

102. Although denying he had taken Mr Turner’s views into account when preparing his adjudication, Mr Wilson ultimately conceded he had considered Mr Turner’s views about facts, the contract, and the case law.

103. But he insisted he had independently considered every item in the adjudication and, in effect, brought his intellectual consideration to bear on every one of them. His position was that Mr Turner had been a great help, but in the end he, Mr Wilson, was the one who had made all the decisions.

104. An interesting aspect of this part of the case was that there was evidence Mr Turner had been available to give evidence if anyone had asked him to. There was no evidence to explain his absence.

105. Mr Miller asked me to infer Mr Turner, if called, would not have assisted the defendants’ case on this issue.

106. Mr Miller submitted I would not accept Mr Wilson’s evidence that the document had been his, in the sense that he had applied his mind to and decided every issue. He did not submit Mr Wilson had been dishonest in his assertions, submitting, rather, that he had been honestly mistaken.

107. On the failure of either defendant to call Mr Turner, Mr Moffett submitted this case could be distinguished from cases such as Dilosa v Latec Finance Pty Ltd (1968) 84

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WN (NSW) Pt 1 557 at 582. The failure to call Mr Turner, he submitted, could readily be explained by the cogency of Mr Wilson’s evidence. Further, he submitted, as a solicitor (which the evidence showed he is), he is an officer of the Court, and much less likely than others, to lie.

108. Mr Orlov submitted his client had engaged intellectually in all the material he had been required to engage in. He submitted nothing in the Act prevents an adjudicator from having assistance from someone who prepares a draft adjudication.

109. Mr Orlov referred me to cases where ministers of the crown had obligations to make decisions but had the right to have assistance in the process: Tickner v Chapman (1995) 57 FCR 451, Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985) 162 CLR 24, O’Reilly v The Commissioners of the State Bank of Victoria (1982) 153 CLR 1. He also referred me to Minister for Local Government v South Sydney City Council [2002] NSWCA 288; 55 NSWLR 381, where appointees of the NSW Government required to inquire into election results were found to have appropriately had help with aspects of their inquiry.

Consideration

110. A remarkable aspect of the FIT document is its use of language, such as “I decide” and “I find”, which are expressions one associates with decision makers and adjudicators.

111. The FIT document shows that Mr Wilson adopted some of those expressions as his own, and for others, substituted his own or adopted Mr Turner’s words with a variation. For example at [89] Mr Turner wrote “I find that there has been no abuse of process and therefore there can be no estoppels, and I so decide”, whereas Mr Wilson later wrote “In my opinion, and I so decide, there has not been any abuse of process and no estoppel can arise.”

112. At [90], Mr Turner wrote: “I am satisfied that there is a construction contract between the parties, that the Claimant has served a valid [sic].” That was amended by Mr Wilson to say “I am satisfied the parties are parties to a construction contract, as defined.”

113. The time sheet entries (at Tab 25 in Vol 1 of the Judges Book) describe work done by Mr Turner on the FIT document. They include entries such as “Receive adjudication response, complete review of jurisdictional facts”, “Review submissions, commence consideration of jurisdictional issues, prepare structure of determination draft”, “Review jurisdictional submissions, drafting decision re jurisdictional issues”, (and several more like entries); “Deciding substantive variation claims”, “Review materials, decide variations”. There are no corresponding entries for work done by Mr Wilson suggesting Mr Wilson directed him to do any of those things.

114. A compilation of times spent by Messrs Wilson and Turner on their various cases, including this one, shows that of 81 hours of work charged by Mr Wilson, 40 hours were done by Mr Turner and 41 by Mr Wilson.

115. Time sheet documents also show that at this time Mr Wilson was working extraordinarily long hours, at times, almost 20 hours in one day. Mr Wilson when cross examined about this, said that at times, he barely had time to sleep.

116. The time sheets show Mr Wilson did little work on this project before 20 July 2016.

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117. I accept Mr Miller’s submission that the use of singular words in s 22, such as “an adjudicator” (s 22(1), shows that the job of adjudicator is personal to the person who agrees to adjudicate.

118. I do not consider s 24(2) requires that an adjudicator work alone, with no clerical or other assistance. Clearly, adjudicators must have some assistance. In the end, whether the assistance amounts to a usurpation of the task of adjudication must be a matter of degree.

119. However, as much as Mr Wilson sought to say all the work was his, I infer most was that of Mr Turner, and that he adopted Mr Turner’s work to a substantial degree and put forward the final product as his own. That is powerfully supported by the time entries and the document SW3 and to a degree by the oral and affidavit evidence of Mr Wilson.

120. In Laing O’Rourke v H and M [2010] NSWSC 818 at [39] McDougall J said:

“In my view, the obligation to consider matters imposed by [the equivalent section in the NSW legislation to s 24(2)] should ... [require] an active process of intellectual engagement. It may be thought that this imposes a substantial burden on adjudicators. That may be so;but there are at least two reasons why, even if that is correct, it does not justify reading down the statutory obligation to “consider”. The first is that adjudicators are not forced to accept nomination. They may decline nomination; or they may accept only on the condition that they are given some longer period of time than ten working days to produce their determination. The second reason is that the outcome of the adjudicators consideration may have very significant consequences.”

121. I ask myself whether I accept Mr Wilson’s evidence that he, in effect, actively and intellectually engaged in the decision making process for all aspects of the adjudication. I have considerable unease about accepting his evidence that he did.

122. Mr Wilson at the time the adjudication was prepared, according to the time sheets, was spending 19 hours per day on other projects.

123. He was extremely busy. He was working up to 20 hours per day, barely having time to sleep.

124. He agreed he had received Mr Turner’s opinions on some matters, and must have taken them into account.

125. Mr Turner’s chargeable time for the project was much the same as his.

126. The adjudication document was very long and involved many and varied legal and factual issues.

127. I had the considerable opportunity of seeing Mr Wilson being cross examined. I thought he gave it honestly, but I consider, as Mr Miller submitted, Mr Wilson was mistaken in asserting he did all of what was required of him.

128. I am not satisfied on the balance of probabilities Mr Wilson actively engaged in the decision-making process of all aspects of the adjudication he was required to undertake. I am satisfied he took into account documentation prepared by Mr Turner without that active engagement. That, it seems to me, was a failure to comply with s 24(2) of the Act.

129. As to the failure of either defendant to call Mr Turner, however, I do not consider he could have thrown light on the part played by Mr Wilson. It seems to me that the issue

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is not so much what was the fruit of Mr Turner’s labour, but what Mr Wilson did with the product of his labour.

130. As to the cases cited by Mr Orlov concerning a decision-maker’s right to have assistance, I do not find them helpful in construing the Act. Tickner and Peko-Wallsend and O’Reilly involve the exercise of powers by ministers of the Crown who had no choice about exercising jurisdiction. It follows, as Mason J said in Peko-Wallsend at [38], that it was unlikely Parliament intended a minister’s power be exercised without some assistance.

131. In the South Sydney case it was held that the relevant statute contemplated the statutory holders of a power to inquire, were to have assistance which would not in the circumstances amount to an inappropriate delegation of their function.

132. Here however the Act is quite explicit about what an adjudicator may consult.

133. Although I accept Mr Orlov’s submission that his client was entitled to have assistance, what occurred here was far more than that somewhat benign description.

134. The parties were entitled to have their dispute decided by the person who had agreed to decide it. They did not have that.

135. On this ground I would have declared the determination void.

The Appeal

136. I shall turn now to the appeal.

137. The first defendant consented to the filing of the appeal, so leave is not required: s 43(3)(a). Further, to succeed, the appellant does not necessarily need establish error on the face of the record.

138. The appellant contended that two errors of law had been made, and each warranted allowing the appeal. The first concerned an issue of waiver. The second, which I have dealt with above, concerned whether the payment claim had been served on a reference date.

139. For the reasons set out above as to the reference date, the appeal must succeed. I am satisfied that in finding the payment claim was served on a reference date, the adjudicator made an error of law.

140. However I shall also consider the plaintiff’s argument that Mr Wilson made an error of law when finding St Hilliers had waived its right to insist that ACT Projects comply with contractual time limits.

Waiver

141. This aspect of the first defendant’s claim concerned items which were variations to the contract.

142. St Hilliers submitted that when he found there had been a waiver by it of its right to have payment claims served on time, Mr Wilson did not identify the proper legal test for waiver, or make any relevant findings of fact which could go to the conclusion of there having been any such species of estoppel. That, it was submitted, amounted to an error of law.

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143. Claims for variations were required to be made within a time limit imposed by cl 15.9 as follows:

If the Subcontractor considers that a Direction by St Hilliers which is not expressly identified as a variation, is in fact a variation … then the Subcontractor must notify St Hilliers of this view within 14 days of the receipt of the Direction. If St Hilliers considers that the Direction is a Variation it will within 14 days of receiving the Subcontractor’s notice confirm this in writing, in which event the varied work will be valued under this clause. Unless the Subcontractor gives the notice required under this subclause the Subcontractor may not make a claim against St Hilliers in respect of the work the subject of the Direction whether under this Subcontract or (insofar as is permitted by law) pursuant to any other principle of law. (My emphases).

144. It is St Hilliers’ case that ACT Projects made claims for variations, but in respect of some of them did not comply with the cl 15.9 time limit, so was barred from including the claims in its payment claim.

145. Then, when it relied on the cl 15.9 time limit in its submissions to Mr Wilson, he received submissions on the point from ACT Projects which, by reason of an error of law, he accepted.

146. The error vitiates the determination; so the appeal must be allowed and the determination set aside.

147. An extract from the plaintiff’s written argument of 12 September 2016 is as follows:

68 As recorded by the Adjudicator at [110] to [124] of the Determination, there was an issue in the adjudication as to whether ACT Projects was barred from making claims for certain variations by reason of its (admitted) non-compliance with clause 15.9 of the Contract.

69 The effect of clause 15.9 of the Contract was accurately summarised by the Adjudicator at [112] of the Determination. Clause 15.9 provided ACT Projects with an opportunity to notify St Hilliers of an alleged variation if ACT Projects considered that it received a direction which was not expressly identified as a variation, but in fact was. In those circumstances, ACT Projects needed to notify St Hilliers within 14 days of receipt of the direction. If ACT Projects failed to provide the required notification in time, it would be barred from any entitlement to make a claim in relation to that direction.

70 As recorded at [110] of the Determination, ACT Projects asserted that St Hilliers “waived” its entitlement to rely on the bar in clause 15.9 of the Contract.

71 The Adjudicator dealt with the issue of “waiver” at a global level at [119], [121], [123] and [124] of the Determination. Each of [119], [121] and [123] commence with the words “As a generalisation”. It is clear from those words, that at those paragraphs the Adjudicator was stating a broad and general proposition, but was not making any specific finding as to “waiver”. The generalised statements at [119], [121] and [123] are given content by [124]. It is at [124] that the Adjudicator explained what process of reasoning he was planning to adopt to determine whether in light of the general propositions advanced at [119], [121] and [123], St Hilliers waived its right to rely on clause 15.9.

72 It is submitted that the questions the Adjudicator posed for himself to determine at [124] of themselves constitute, or necessarily give rise to, a manifest error of law. Under section 43 of the BCISP Act, an adjudicator will make a manifest error of law where the adjudicator’s reasons disclose that the adjudicator proceeded on a basis that identified facts giving rise to legal consequences when in law they do not. This is what occurred in this case. None of the questions the adjudicator posed for himself at [124] could give rise to the legal consequence of “waiver”.

73 The Adjudicator led himself into error from the very beginning because he did not identify what species of waiver he was considering. It is trite that “waiver" is used as no more than a conclusionary word stating the consequences of the operation of a more

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specific principle, for an example an estoppel, an election or a forebearance. It is the specific and independent elements of each principle that need to be considered. The Adjudicator’s error lay in the fact that he did not identify what species of waiver he was concerned with and consequently did not direct himself to consider the specific and defined elements of any of the species of waiver.

74 By approaching the issue in this way, the Adjudicator directed himself to consider facts which at law cannot give rise to legal consequences.

75 The Adjudicator’s error was not only manifest in the way he asked the question, but also in the way he conducted his analysis.

76 At [171] – [193] of the Determination, the Adjudicator determined that $86,568 of the $123,426 claimed by ACT Projects was payable in respect of variation claim 2.9. The issue of “waiver” was dealt with at [174] to [179]. There the Adjudicator recorded that St Hilliers rejected the variation in whole because it asserted it was time-barred. The Adjudicator rejected that submission in one paragraph stating “I decide that the Respondent has not substantiated any entitlement to rely upon a time bar and find accordingly that the variation claim is not barred.”

77 Firstly, the Adjudicator did not consider any of the matters he said he was required to consider at [124]. However, even more fundamentally, the Adjudicator made a general finding of waiver without reference to any of the elements required to give rise to the legal consequences of waiver

78 For example, if by “waiver” the Adjudicator meant an “election” by St Hilliers to not rely on clause 15.9 of the Contract, the Adjudicator would have had to grapple with the elements of an election, namely whether anything St Hilliers did could be described as an “intentional act, done with knowledge, whereby a person abandons a right by acting in a manner inconsistent with that right has been described as the “waiver” of that right.”

79 Had the Adjudicator done so, the Adjudicator would have needed to have considered St Hilliers submission in its Adjudication Response that on the facts before him “there is no election between inconsistent options. Even accepting ACT Projects characterisation of the conduct of St Hilliers, all than can be said is that St Hilliers was engaged in a dialogue with ACT Projects in order to reach a commercial resolution of the ACT Projects’ claims for variations. In no sense is an election required between relying on strict terms of the Subcontract and engaging in negotiation”. The Adjudicator did not do so. On the face of the Determination, he did not turn his mind to this element.

80 By failing to direct himself as to the proper question to be asked, what the Adjudicator did, was to reverse the onus and state that it was for St Hilliers to establish that it did not waive reliance on clause 15.9 of the Contract.

81 It is trite that the person alleging the waiver of a contractual or other obligation bears the onus of proving the waiver. The Adjudicator misunderstood this and placed the onus on St Hilliers to substantiate an entitlement to rely on an express provision of the Contract. In other words, without finding that ACT Projects discharged its onus of proving waiver, the Adjudicator approached the question from the perspective that clause 15.9 of the Contract was waived, unless St Hilliers could substantiate otherwise. That error is as manifest as any.

82 In respect of the other variations, the failure is even more pronounced. At [357] to [364], the Adjudicator addressed Variation Claim 2.44. The Adjudicator recorded at [359c] St Hilliers’ submission that the variation claim was time-barred. However, the Adjudicator then awarded ACT Projects the full amount of the variation without any consideration at all of St Hilliers’ reliance on the time-bar. That error goes beyond manifest error – it amounts to a denial of natural justice. It should not be permitted to stand (footnotes omitted).

148. In the course of his oral argument I took Mr Miller to agree that in the course of construction there had been times when St Hilliers had accepted claims as variations without insisting on strict compliance with cl 15.9. But he submitted that when responding to ACT Project’s claim before the adjudicator, St Hilliers had asserted certain claims were variations and in respect of them there had been a failure to

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comply with the cl 15.9 time limit. The ACT Projects assertion that a practice had existed from which a waiver should be inferred, should be rejected, he said.

149. Submitting the adjudicator’s finding of waiver had been an error of law, Mr Miller referred me to Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570, where the High Court said at [51]:

“Waiver has often been used in senses synonymous with election or estoppel. It has been suggested that waiver is indistinguishable from one or other of those doctrines. Sometimes, although expressed in terms of waiver, the reasoning adopted in cases reveals the elements for applying a more specific principle, typically election or estoppel. And it may be that in cases of the several kinds last mentioned, the term is used as no more than a conclusionary word stating the consequences of the operation of that more specific principle, rather than as indicating the application of any distinct and independent principle.”

150. In Fulton Hogan Construction Pty Ltd v Brady Marine and Civil Pty Ltd [2015] ACTSC 384 where an adjudicator had incorrectly found waiver, Mossop AsJ (as his Honour then was) said at [37]:

“In my view a manifest error of law exists upon the face of the adjudication decision. That is because the reasons disclose that the adjudicator found waiver or estoppel in circumstances where there was no finding of reliance that could support either waiver or estoppel. In other words … the reasons of the adjudicator indicate that the decision was made on the basis that a failure to rely on a contractual provision … suffices, without more, to alter … the party’s rights and obligations.”

151. At [116] of the adjudication Mr Wilson noted: “it was accepted practice by the parties that (the claimant) would submit any variations in a month at the same time as that month’s Payment Claim….”

152. Then at [117] he said “The Respondent has not disputed the Claimant’s description of the parties’ conduct…”

153. At [119] he said, concerning the way the parties had dealt with notifications of variations:

I would consider that to be evidence of conduct that might constitute waiver of the…time bar in Clause 15.9.

154. St Hilliers submitted to him that waiver could not be retrospective. But at [120] he said inter alia:

The Respondent has not cited authority or argument in support of its contention that its alleged waiver…cannot be retrospective.

155. At [121], and [123] he said:

As a generalisation, I agree with the Claimant’s submission that, in circumstances in which the Claimant might otherwise be barred from making a claim and the Respondent has proceeded to consider the Claimant’s claim, engaging with the Claimant “as to the merits of the claim”, the respondent will have waived its entitlement to rely on the time bar provisions

...

As a generalisation, in circumstances in which the Respondent’s conduct has been consistent, over a period of time, with an apparent decision to waive its right to rely upon the time bar in Clause 15.9, the Respondent was obliged to advise the Claimant that, in future, the Respondent would rely upon and enforce that right

156. After making those observations, he proceeded to find St Hilliers had waived its cl 15.9 right to a time limit, so the variations were payable.

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157. Mr Miller submitted inter alia there had been no finding of any reliance by ACT Projects, and that such a finding was a necessary ingredient of estoppel in all its forms.

ACT Projects’ Submissions

158. Mr Moffett submitted all the relevant findings had been present, and that this case is distinguishable from Fulton Hogan Construction Pty Ltd.

159. He referred me to authorities including Thompson v Palmer (1933) 49 CLR 507 at 547 where Dixon J said an estoppel prevents

an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other’s detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party.

160. Mr Moffett referred me to the submissions which had been put to the adjudicator by the parties on the waiver issue. In particular there was this from ACT Projects:

ACT Projects relies on the fact that St Hilliers continued to negotiate to determine the value of these variation claims by reassessing and engaging independent consultants in good faith and it would not have done so had St Hilliers not validated these claims by not rejecting the claims.

161. Mr Moffett said:

By reassessing and engaging independent consultants in good faith, it would not have done so had St Hilliers not validated these actions by not rejecting the claims…Such detriment is easy to ascertain, being evident in the cost claim in the variations themselves.

162. He submitted there was also the cost of engaging the quantity surveyors, APK, and that too was a relevant detriment.

163. Mr Moffett submitted it had never been contended by St Hilliers that the process of submitting variation claims had been otherwise than as contended for by him.

164. Although St Hilliers had never said it would not rely on the time limits, Mr Moffett submitted that was not fatal. There had been a course of conduct which both parties had engaged in.

165. He submitted that where the adjudicator had used the word “waive” in [123], he had used it in the sense used in the context of conventional estoppel.

Consideration

166. I accept Mr Miller’s argument that the finding of waiver was an error of law.

167. There was no detrimental reliance finding in the adjudication, nor any finding that it would have been unjust for St Hilliers to have altered its position.

168. There was an assertion of a detrimental alteration of position relying on an implied representation, but no finding on that assertion.

169. The basis of the waiver claim by ACT Projects was that on occasions in the past when it had put in variation claims late, they had been treated on their merits by St Hilliers, which had not dismissed them out of hand by relying on the time limit. In its submissions to Mr Wilson, St Hilliers, conceding this had occurred, pointed out, in effect, this had been for good practical reasons at the time.

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170. The adjudicator’s view of waiver however may be seen from this, at [121]:

As a generalisation … [where] the Claimant might otherwise be barred … and the Respondent has proceeded to consider the … claim, engaging “as to the merits” … the Respondent will have waived its entitlement to rely on the time bar…

171. In saying that, and accepting he was only using a “generalisation”, the adjudicator, unfortunately, misstated the law. Using waiver in the sense of being a form of estoppel, as St Hilliers submitted, for waiver to apply there must be some alteration of position, or detrimental reliance, induced or brought about by the representee’s prior conduct.

172. Mr Moffett pointed to what he said had been detrimental reliance. But the adjudicator made no specific finding of reliance, or of any causal connection between any reliance on conduct of St Hilliers, and any such detriment.

173. Although Mr Moffett pointed to the employment of quantity surveyors as a detriment, the reference at [172] of the Adjudication Determination to quantity surveyors having recently been engaged to calculate quantities of a variation item does not assist. There was no finding that that retainer occurred by reason of any reliance by ACT Projects on St Hilliers’ conduct.

174. As did the adjudicator in Fulton, it seems to me Mr Wilson simply proceeded on the erroneous view that a prior failure to insist on rights amounts to a waiver of those rights.

175. Further erroneous reasoning can be seen from the way the the adjudicator treated the the issue of onus. At [176]-[178] the following appears:

Neither party has provided any further submissions, particularly in relation to the factual matrix required to establish the time bar

…

I decide that [St Hilliers] has not substantiated any entitlement to rely upon a time bar and find accordingly that the variation claim is not barred.

176. The contents of those two paragraphs suggest Mr Wilson considered it was up to St Hilliers to persuade him no waiver applied, rather than there being an onus on ACT Projects to show it did.

177. Further support for the proposition that he had an erroneous view on onus, was at [120](b) where he dealt with a submission there could be no retrospective waiver:

The Respondent has not cited authority for the argument in support of its contention that its alleged waiver of Clause 15.9 cannot be retrospective.

178. The appeal should also be allowed on this ground.

The Adjudicator’s Fees

179. It will be recalled that once the adjudication was prepared, the parties were notified and the adjudicator insisted on being paid before it was released to the parties. He was then paid and the adjudication released accordingly.

180. However St Hilliers says Mr Wilson had not been entitled to be paid his fees, because s 36(4) provides there is no entitlement to fees if an adjudicator fails to make a decision in the time allowed by s 23(3), and on the facts proved, he did not make his decision until 26 July 2016, 4 days late. ACT Projects has informed me through its counsel that

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if the plaintiff’s claim is unsuccessful, it proposes to seek return of the fees. Although the plaintiff has succeeded, in case the matter goes further, I shall deal with the issue.

181. Mr Wilson said his determination was made within time.

182. Mr Orlov, taking me carefully through the chronology of events, submitted Mr Wilson had made the determination within the required time and I should accept his evidence on that issue.

183. Mr Moffett in effect adopted that submission.

184. There was evidence that on 26 July 2016 ATPL told the parties they had received the decision but the adjudicator wanted to be paid before it was released. The first defendant paid the invoice that day, and later that day ATPL sent the determination to the parties and confirmed the invoice had been paid.

185. Mr Orlov submitted it is the determination which must be made in time. If it is provided to the parties after the day of the determination, that is consistent with the Act. The Act does not require the parties to be given the adjudication on any particular day.

186. He drew my attention to evidence that ATPL had received the determination but had seen some typographical errors and suggested they be fixed, as well as a reference to the rate of interest to be charged on the sum said to be payable.

187. To demonstrate that the requirement is for the determination to be made within time, and not the provision of it to the parties, Mr Orlov referred me to s 23 (3) of the Act, which provides:

(3) The adjudicator must decide an adjudication application as soon as possible but not later than—

(a) if the respondent is entitled to give an adjudication response under section 22—10 business days after the earlier of—

(i) the date on which the adjudicator receives the adjudication response; and

(ii) the date on which the adjudication response is required to be given to the adjudicator under section 22; or

(b) if the respondent is not entitled to give an adjudication response under section 22—10 business days after the respondent receives a copy of the adjudication application; or

(c) if a further time is agreed between the claimant and the respondent—the further time.

188. He submitted that in any event his client had been at liberty to amend the determination under the slip rule, referring me to s 24(5) which is as follows:

(5) The adjudicator may, on the adjudicator's own initiative or on the application of the claimant or the respondent, correct a decision for—

(a) a clerical mistake or defect of form; or

(b) a material miscalculation of figures or a material mistake in the description of any person, thing or matter mentioned in the decision.

189. He also referred me to s 36(4)–(5) which are as follows:

(4) An adjudicator is not entitled to be paid costs or expenses in relation to the adjudication of an adjudication application if the adjudicator fails to make a decision on the application within the time allowed by section 23 (3).

(5) However, subsection (4) does not apply—

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(a) if the failure to make a decision is because the application is withdrawn or the dispute between the claimant and respondent is resolved; or

(b) if an adjudicator refuses to communicate the decision on an adjudication application until the fees and expenses are paid; or

(c) in circumstances prescribed by regulation.

190. He submitted that on the facts his client had completed the adjudication in the time allowed him, that is on 22 July, and he had not been obliged to get it to the parties that day.

191. Additionally, because he had asked to be paid before release of the determination to the parties, s 36(5) applied, so normal time limits did not apply.

Consideration

192. I accept Mr Orlov’s submission that under s 23(3) the obligation to do something in a certain time is to decide, not necessarily to make the adjudication available to the parties.

193. I conclude that insofar as Mr Wilson did decide the matter, he did it within time; the adjudication was not made available to the parties until several days later, but that did not amount to a breach of the Act and did not of itself disentitle him to be paid his fees.

194. It was common ground that the determination had to be completed by the last stroke of 22 July.

195. According to the evidence of Mr Wilson, he worked on the determination before midnight on 22 July, before midnight determining the amount due by St Hilliers at $222,260. (I did not take that evidence to be disputed, but in any event I am satisfied that is so, by reason of the time sheets and the fact he did not charge for any work after that date.) On 25 July he notified ATPL of the determination, and then sent it to ATPL.

196. In the determination, which was dated 22 July 2016, the due date for payment by St Hilliers appeared as 1 July 2016, and the rate of interest on unpaid money was said to be 8%. There was evidence he changed those and some other items after 22 July but before the determination was given to the parties.

197. Mr Orlov submitted that his client had nonetheless complied with s 24(1), and had been entitled to make amendments as and when he made them.

198. It appears that in the course of business on 25 July, according to Mr Wilson, Ms Lorraine Foster, from ATPL contacted him and pointed out that the interest rate was wrong and there were some typographical errors. She also noticed a conflict in the determination because at one point it said the amount owing was payable on 1 July, but in another place it said 30 June.

199. Mr Wilson says he accepted her suggested amendments and they were incorporated in the version of the determination previously sent to ATPL. He says he found some other typographical errors, and fixed them too.

200. The next day Ms Crompton of ATPL told Mr Wilson the interest rate should not have been stated, and that there should just have been a statement saying interest was payable at the rates applicable under the rules of the Supreme Court.

201. Mr Wilson says he accepted that, and asked that an appropriate amendment be made by ATPL.

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202. Then, the evidence shows that on 26th July the parties were notified the decision had been made but that it would not be released until Mr Wilson’s invoice had been paid.

203. The invoice, in fact from ATPL, was paid that day by ACT Projects.

204. Mr Orlov submitted an adjudicator may amend an adjudication under the slip rule provision in s 24(5), and that the revisions, which he had been entitled to make, had not altered the decision.

Consideration

205. I am not persuaded Mr Wilson, insofar as he made the determination, made it after the time allowed.

206. I am satisfied the delay in notification of the parties of the determination was not of itself something which disentitled Mr Wilson to his fees.

207. As I have observed above, s 23(3), which imposes the time limit, is concerned to ensure the decision is made in time, not that the parties are notified of it in time.

208. In Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; 78 NSWLR 393 at 192 McDougall J said of the NSW equivalent section to s 24:

“The [required] “determination” is the performance of the tasks described in s [24(1)]. What is determined is the amount of the progress payment, its due date for payment and the rate of interest payable. The issues of fact and law dealt with in the reasons required to be given pursuant to [s 24(3)(b) are not “determined” in that sense, although undoubtedly they may … explain the determination that was made”.

209. I respectfully adopt his Honour’s construction of the section.

210. Time sheets in evidence support Mr Wilson’s evidence that, insofar as the decision was his, he made it on or by 22 July 2016. Although the interest rate on the version done that day was later changed, he did on that day specify a rate, and he was entitled, as he later did, under the slip rule, to change it.

211. Thus although elsewhere I have declined to accept his evidence on an issue, I accept it on this one.

212. It is to be observed further that the Act shows by s 24(5) that an adjudicator is entitled to fix errors. If that involves extending the time for the parties to be notified, that is something the Act permits, in my view. Normally of course one might expect errors to be fixed would be ones found by the parties, especially the party wishing to enforce the determination.

213. But I consider the section permits amendments at the adjudicator’s initiative before the parties see the determination. Obviously, any amendment in this category would need to be made promptly, and so as not to cause any unreasonable delay in the provision of the determination to the parties.

214. The errors were, I am satisfied, clerical or defects of form, thus of a kind contemplated by the s 24(5) of the Act.

215. Thus I am satisfied Mr Wilson was entitled to make the amendments he made when he did. In my view Mr Wilson was not disentitled to fees because of that.

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216. Further, I consider s 36(4) did not apply because there was unchallenged evidence that ATPL demanded fees at Mr Wilson’s request before the determination was made available.

217. So I consider s 36(5) of the Act applied, and Mr Wilson was not disentitled to his fees by reason of the lateness of delivery of the determination to the parties.

Summary

218. The plaintiff has succeeded on all of its arguments, save in relation to the second defendant’s fees. That argument however was only relevant in the event money was found owing by the plaintiff to the first defendant: see [49] to [55] of the Further Amended Originating Application of 12 October 2016.

219. By reason of my findings, the plaintiff in SC 363 of 2016 is entitled to orders 2, 3, and 7. As the determination is to be set aside I see no utility in making order 3 of the Further Amended Originating Application. In SCA 59 of 2016 the appellant is entitled to an order that the appeal be allowed, and (order 6A) that the determination be set aside.

Costs

220. Although I will entertain argument (in writing) about costs, my provisional view is that costs should follow the event so that the plaintiff’s costs should be paid by both defendants. Despite the general rule that no order for costs be made against an adjudicator, here, because of his active involvement in defence of his position, I consider he should share some of the the costs liability: Fernando v Medical Complaints Tribunal at [21]. As did the tribunal member there, the second defendant had an indemnity under the Act: s 37(1). That is an additional factor I take account of on this issue: Fernando at [22].

221. My provisional view is that because most of the costs were incurred by the first defendant’s defence of the proceedings, Mr Wilson should bear 20% of the plaintiff’s costs and the first defendant 80%.

Orders

SC 363 of 2016

1. I declare that the purported adjudication determination of the second defendant dated 22 July 2016 in adjudication application 2016ACTAT017 (the determination) is void.

2. The determination is set aside.

3. The sum of $222,260.53 in court be paid out to the plaintiff.

SC 59 of 2016

4. The appeal is allowed.

5. Pursuant to s 43(6)(a) of the Act the determination is set aside.

Submissions on Costs

222. I give liberty to the parties to make written submissions on costs. I direct that any such submissions which the defendants wish to make, be filed and served by 11 August 2017.

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223. Any submissions the plaintiff wishes to make in response, are to be filed and served by 18 August 2017.

224. Any submissions in reply by the defendants are to be filed and served by 25 August 2017.

I certify that the preceding two hundred and twenty-four [224] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Walmsley.

Associate:

Date: 20 July 2017

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