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Taringa Property Group Pty Ltd v Kenik Pty Ltd[2024] QSC 298
Taringa Property Group Pty Ltd v Kenik Pty Ltd[2024] QSC 298
SUPREME COURT OF QUEENSLAND
CITATION: | Taringa Property Group Pty Ltd v Kenik Pty Ltd [2024] QSC 298 |
PARTIES: | TARINGA PROPERTY GROUP PTY LTD (applicant) v KENIK PTY LTD (first respondent) RHIANN STOREY REGISTERED ADJUDICATOR NO. J15056123 (second respondent) QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (third respondent) |
FILE NO/S: | BS 2242 of 2024 |
DIVISION: | Trial Division |
PROCEEDING: | Hearing |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 6 December 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 18 April 2024 |
JUDGE: | Hindman J |
ORDER: | Paragraphs 2 and 3 of the application are dismissed. |
CATCHWORDS: | CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – PAYMENT CLAIMS – where the applicant, as the principal contractor engaged the respondent to design and construct a retail complex – where the applicant seeks to have an adjudication decision made in favour of the first respondent declared void – whether such a declaration ought to be made ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – JURISDICTIONAL MATTERS – where an adjudication decision in the amount of $4,218,787.02 was made under the Building Industry Fairness (Security of Payment) Act 2017 – where the applicant submits the decision is void for jurisdictional error on four grounds – where the applicant alleges the payment claim relied on by the first respondent in making the adjudication application was invalid as it was not made in relation to an available reference date – whether this ground is made out ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – PROCEDURAL FAIRNESS – where the applicant submits that a failure by the adjudicator to consider submissions and other evidence was a breach of natural justice – where the applicant contends there was a material denial of natural justice by the adjudicator determining the issues on grounds not contended for and in respect of which the applicant was not given the opportunity to address – whether the adjudicator failed to consider the submissions – whether the adjudicator failed to give the applicant an opportunity to address – whether any such failures were material ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – PROCEDURAL FAIRNESS – where the applicant contends that there was a denial of procedural fairness by the manner in which the adjudicator determined the methodology and applicable percentage for the claims that were awarded under the decision – whether there was a denial of procedural fairness – whether any denial was material Building Industry Fairness (Security of Payment) Act 2017, ss. 67, 68, 70, 75, 82, 84, 88, 97B, 101, 126 Building Industry Fairness (Security of Payment) Regulation 2018 Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd (2020) 4 QR 410 Alan Conolly and Co v Commercial Indemnity [2005] NSWSC 339 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 Annie Street JV Pty Ltd v MCC Pty Ltd [2016] QSC 268 BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2015] 1 Qd R 228 BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2012] QSC 346 Caltex Refineries (Qld) Pty Ltd v Allstate Access (Australia) Pty Ltd [2014] QSC 223 Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215 City of Ryde v AMFM Constructions Pty Ltd [2011] NSWSC 1469 Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd (2005) 21 BCL 364; [2005] NSWCA 229 GW Enterprises Pty Ltd v Xentex Industries Pty Ltd [2006] QSC 399 Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2023] QSC 290 John Holland Pty Ltd v TAC Pacific Pty Ltd [2010] 1 Qd R 302 JR & LM Trackson Pty Ltd v NCP Contracting Pty Ltd [2019] QSC 201 KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178 Kellett Street Partners Pty Ltd v Pacific Rim Trading Co Pty Ltd [2013] QSC 298 Ku-Ring-Gai Council v Ichor Constructions Pty Ltd [2014] NSWSC 1534 Modog Pty Ltd v ZS Constructions (Queenscliff) Pty Ltd [2019] NSWSC 1743 Musico v Davenport [2003] NSWSC 977 Niclin Constructions Pty Ltd v Robotic Steel Fabric Pty Ltd [2023] QSC 218 Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2012] 1 Qd R 525 Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2010] QSC 95 Northbuild Constructions Sunshine Coast Pty Ltd v Beyfield Pty Ltd [2014] QSC 80 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Rail Corporations (NSW) v Nebax Constructions [2012] NSWSC 6 Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320 SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307 Sought After Investments Pty Ltd v Unicus Homes Pty Ltd [2019] NSWSC 600 Spankie v James Trowse Constructions Pty Ltd (No 2) [2010] QSC 166 T & M Buckley Pty Ltd v 57 Moss Road Pty Ltd [2010] QCA 381 Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32 Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QSC 373 Total Lifestyle Windows Pty Ltd v Aniko Constructions Pty Ltd [2021] QSC 92 Transgrid v Walter Construction Group [2004] NSWSC 21 Trysams Pty Ltd v Club Instructions (NSW) Pty Ltd [2008] NSWSC 399 Walton Construction (Qld) Pty Ltd v Corrosion Control Technology Pty Ltd [2012] 2 Qd R 90 Watpac Construction (Qld) Pty Ltd v KLM Group Ltd [2013] QSC 236 |
COUNSEL: | L Campbell for the applicant C Truong KC with L Tassell for the respondents |
SOLICITORS: | Muscat Tanzer for the applicant HWL Ebsworth for the respondents |
Introduction
- [1]The applicant (TPG) seeks to have an adjudication decision dated 14 February 2024 (Decision) made by the second respondent (adjudicator) pursuant to the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) in the sum of $4,218,787.02 in favour of the first respondent (Kenik) declared void in whole or part as a consequence of alleged jurisdictional error. Related relief is also sought.
- [2]TPG has paid into court, pursuant to orders dated 29 February 2024, the sum of $4,825,708.11 in respect of the adjudicated amount plus an amount for interest and adjudication costs.
- [3]TPG submits the Decision is void for jurisdictional error on four alleged grounds:
- Ground 1: the payment claim relied on by Kenik in making the adjudication application was invalid as it was not made in relation to an available reference date, as the purported payment claim given on 8 September 2023 was preceded by claims given by Kenik earlier that day that were themselves statutory payment claims;
- Ground 2: the adjudicator committed jurisdictional error in deciding that loans or advances made by TPG to Kenik and a payment made directly by a related party of TPG to Kenik (a little over $2 million in total) were not to be included in the amount paid to date that, if included, would have significantly reduced the progress payment the adjudicator determined was payable to Kenik. The adjudicator:
- failed to consider TPG’s submissions and evidence that the payments were between the parties and would be repaid by being offset against future progress payments under the contract; and
- materially denied procedural fairness to TPG by determining the relevant issues on grounds not contended for and which TPG was not given an opportunity to address,
- Ground 3: the adjudicator determined the entitlement to payment for additional work arose pursuant to ss. 67(2) and 70 of the BIF Act on the basis that the work had been performed prior to termination. In doing so, the adjudicator disregarded a limitation on her jurisdiction by allowing the claim upon a basis other than the contract, which was a jurisdictional error;
- Ground 4: TPG was materially denied procedural fairness by the manner in which the adjudicator determined the methodology and applicable percentage for the claims that were awarded as preliminaries in variation claim 16.
- [4]There are three additional matters that may require determination in the proceeding:
- whether severance of the adjudicated amount should occur following any finding of jurisdictional error;
- in relation to claims for subcontractors’ charges and a payment withholding request received by TPG, whether the amount of $803,267.16 ought be retained (in court or otherwise) from any amount payable by reason of the Decision, pursuant to ss. 97B and 126 of the BIF Act;
- whether there should be a stay preventing enforcement of the judgment debt obtained by Kenik, in whole or in part.
- [5]The parties have agreed, and I have agreed, to adjourn the part of the application seeking the stay to a date to be fixed.
- [6]In the result, I am not satisfied that the Decision is affected by jurisdictional error. Each ground will be dismissed:
- as to Ground 1, objectively, Kenik sent and TPG received a single demand for payment constituted by the final document given on 8 September 2023, being the Payment Claim;
- as to Grounds 2 and 4, the adjudicator properly considered all necessary matters and accorded the necessary level of procedural fairness to TPG on the issues and was not required to request further submissions;
- as to Ground 3, the adjudicator found an entitlement to payment under the contract by reason of rights accrued prior to termination.
- [7]I do consider that of the amount paid into court, regardless of the ultimate outcome of the stay application, the sum of at least $803,267.16 should be retained on account of notified claims for subcontractors’ charges and a payment withholding request received by TPG.
- [8]It will be necessary for the parties to otherwise be heard further in relation to the stay application and costs. Any other persons with claims upon the monies in court will also need to be given an opportunity to be heard before any monies are paid out of court.
General principles about jurisdictional error in the context of the BIF Act
- [9]An adjudicator’s decision can be reviewed for jurisdictional error and the court may declare an adjudication decision void, in whole or in part, for jurisdictional error.[1]
- [10]The purpose and operation of the BIF Act must be borne in mind in any application for such relief, which include that:
- the object of the BIF Act is to ensure cashflow to construction contractors in recognition of the fact that without cash flow, such contractors may not survive;
- the procedure of adjudication is subject to strict, fast timeframes;
- s. 101(a) of the BIF Act preserves the parties’ ultimate rights that may be pursued by litigation in the ordinary course;
- the procedure of adjudication has been described as “pay now, argue later”.[2]
- [11]The purpose and operation of such legislation has been commented on by the High Court in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd,[3] including why an adjudicator’s decision is not subject to judicial review for non-jurisdictional errors of law.
- [12]The analysis by Bond J (as he then was) in Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd (2020) 4 QR 410, 422-428 [31]-[42] (Acciona) is a good summary of most of the principles (not exhaustive) relating to jurisdictional error in the context of the BIF Act, and has been regularly adopted by other judges of this court.[4] I accept those principles as there articulated.
Summary factual background
- [13]TPG and Kenik were parties to a contract dated 3 August 2020[5] (Contract) by which Kenik (as contractor) was to design and construct for TPG (as principal) a retail complex that included a Coles supermarket and Liquorland at Taringa (Project).
- [14]The Contract contained a variation mechanism in clause 36 whereby, in general terms:
- TPG (through the superintendent) could direct Kenik to vary the works under the Contract;
- after receiving notice of a proposed variation to the works from TPG, Kenik was to provide notice of the costs consequences of the proposed variation works and the impact such works would have on the construction program;
- such variation claims made by Kenik were to be priced in accordance with clause 36.4 of the Contract.[6]
- [15]It is common ground that construction of the works took significantly longer than had been anticipated under the Contract and that, consequently, the costs of construction claimed by Kenik were, in turn, significantly greater than the Contract price for the original scope of works.
- [16]It is also common ground that the Contract ended on 29 August 2023. The parties differ about how the Contract came to an end but that is not a dispute necessary to resolve for the purpose of this proceeding.
- [17]A reference date for the purposes of the BIF Act arose under the Contract on either (and nothing turns on the precise date):
- 25 August 2023 (pursuant to clause 37.1 and item 33 of Annexure A of the Contract)[7]; or
- 29 August 2023 (the date the Contract was terminated).[8]
- [18]Prior to 8 September 2023 payment claims 1 to 30 had been dealt with by the parties.
- [19]On 8 September 2023 Kenik emailed to TPG, by twelve separate emails, twelve documents notifying TPG of various claims.[9]
- [20]The first eleven documents followed a similar format and were delivered in a flurry of about fifteen minutes. Each related to a claimed variation (variation claims numbered 15 to 25).
- [21]Using the first emailed document as an example, it claimed Kenik was entitled to payment of $244,336.05 plus GST. The document itself was entitled “Variations 15 – Obtaining DA”. The document then stated:
“1.This is a claim for the Contractor’s costs arising from additional work arising from the Superintendent’s variation direction (pursuant to clause 26.1) to for the Contractor to obtain an approved DA (Planning permit) for the project.
- Pursuant to clause 36.4, the Contractor is entitled to $244,336.05 plus GST for carrying out the additional work directed as a variation.”
- [22]The variation 15 document then proceeded to explain the basis for the claim, including the additional work at paragraph 9 the subject of that claim. The document satisfied the requirements of s. 68(1)(a) of the BIF Act to identify the construction work.
- [23]
- were emailed between 12:49pm and 1:04pm on 8 September 2023;
- were each stated to be a variation claim by their respective subject lines and the content of the covering emails, as well as within their respective covering letters;
- were different to each other; that is, none of the claims were repetitious or reagitated the same claims;
- were expressed in each correspondence to be variation claims under clause 36 of the Contract[11] (clause entitled ‘Variations’) or extension of time and delay damages claims under clause 34 of the Contract[12] (clause entitled ‘Time and progress’);
- were not accompanied by a supporting statement as required by s. 75(7) of the BIF Act.
- [24]The twelfth document was in a different format and was delivered about three hours later. That last email attached an invoice claiming a payment of $9,689,767.44 including GST (the Invoice).[13] That final email correspondence had the subject line ‘Payment Claim 31’ and documents attached to the email included the Invoice and a signed supporting statement.[14]
- [25]
- it was emailed at 3:57pm on 8 September 2023, after each of the earlier eleven variation claims were delivered;
- it was expressed to be a payment claim in the subject line and body of the covering email, that stated:
“Attached is Kenik Pty Ltd’s payment claim of today’s date in respect of work at 222 Moggill Road, Taringa.
- The payment claim (which includes variation register)
-
The signed supporting statement and aged payables (this has been combined into one document).”
- it was stated in the Invoice, inter alia:[16]
- “Kenik Pty Ltd requests payment of the claimed amount of $9,689,767.44 (inc GST) from Taringa Property Group Pty Ltd (ACN 638 168 626) as trustee for the Taringa Property Group Unit Trust”;
- “Claimed in accordance with the Building Industry Fairness (Security of Payment) Act 2017 (Qld)”,
- it expressed a reference date of 29 August 2023 (noting that the eleven variation claims did not state any reference date);
- it was expressed in the Invoice to be a payment claim by use of the words “PC- 31” and “Date of Payment Claim 31” (whereas the variation claims did not express themselves to be payment claims);
- it included a variation register and sought payment in respect of all unpaid variation claims including, amongst others, variations 15 to 25 that were issued earlier that same day;
- it was accompanied by a single signed supporting statement as required by s. 75(7) of the BIF Act for payment claims (whereas the variation claims did not).[17]
- [26]The twelfth document was in a nearly identical form to the thirty previous payment claims issued by Kenik,[18] that TPG had certified and paid an amount in response. The only material difference between the previous payment claims and the Payment Claim the subject of the adjudication was the substitution of the word ‘Invoice’ for ‘Progress Claim’ at the top of the document.
- [27]On 13 September 2023, TPG (by its solicitors) responded by providing a payment schedule,[19] with reasons for withholding payment, for the scheduled amount of $nil.
- [28]On 26 October 2023, Kenik made an adjudication application in reliance on the twelfth document as the relevant payment claim.[20]
- [29]
- [30]
- [31]On 21 February 2024, Kenik obtained a judgment in respect of the adjudicated amount in Supreme Court proceeding BS2046/24.
- [32]On 23 February 2024, TPG filed this proceeding.
Ground 1: what document was the payment claim
- [33]The adjudicator decided that the payment claim was the Invoice. TPG submits that in circumstances where each of the variation claims served by email, and in particular the first of eleven claims served by separate emails on 8 September 2023, was a payment claim within the terms of s. 68(1) of the BIF Act, the Invoice was an impermissible payment claim given in breach of s. 75(4) that prohibits a claimant from making more than one payment claim for each reference date under the construction contract. If TPG is correct in that submission, I would agree that the Decision would be void for jurisdictional error, the adjudicator not having adjudicated on a valid payment claim. It is well settled that non-compliance with s. 75(4) renders the later payment claim or claims invalid.[23]
- [34]However I do not accept TPG’s submission. I find that the only payment claim was the Invoice for the reasons I set out below. If I am wrong in that conclusion, I would conclude that the payment claim comprises all twelve emails read together. Either way, there is no jurisdictional error as alleged by TPG.
- [35]The relevant facts are set out in [18] to [22] above. I have already emphasised some features of the relevant documents.
- [36]The parties do not appear to be in any serious dispute about the law to be applied:
- the relevant approach to statutory construction is set out by the High Court in cases such as Project Blue Sky Inc v Australian Broadcasting Authority[24] and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue[25] requiring that consideration focus on the text of the provision, in context;
- the objectives of the BIF Act set out in s. 3 are important context;
- the requirements for the content of a payment claim are set out in s. 68 of the BIF Act:
“Meaning of payment claim
- A payment claim, for a progress payment, is a written document that -
- identifies the construction work or related goods and services to which the progress payment relates; and
- states the amount (the claimed amount) of the progress payment that the claimant claims is payable by the respondent; and
- requests payment of the claimed amount; and
- includes the other information prescribed by regulation.
…
- A written document bearing the word ‘invoice’ is taken to satisfy subsection (1)(c).”
- there are no regulations made prescribing additional information to be included in a payment claim;[26]
- s. 75 of the BIF Act provides that a person who claims to be entitled to a progress payment may make a payment claim, subject to certain restrictions that includes that only one payment claim can be made for each reference date;
- a payment claim is to be construed objectively, focused on the objective circumstances and not the subjective intentions or perceptions of one of the parties. The court must take its guidance from the statutory language, which is both simple and clear: T & M Buckley Pty Ltd v 57 Moss Road Pty Ltd [2010] QCA 381 (T & M Buckley), [30]-[38]; KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178 (KDV Sport), [10]-[18] and authorities referred to therein. These authorities also show that the assessment need not be made only by reference to the terms of the claim itself, but also reference to the background knowledge of the parties (by analogy with the identification of construction work);
- the test is whether the claim purports in a reasonable way to identify the particular work in respect of which the claim is made: T & M Buckley; KDV Sport, [17], which test should be applied to all the requirements of s. 68(1). As was concluded by the Court in KDV Sport at [18]:
“The above approach accords with the overall purpose of the Act, which was said by Basten JA in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd[27] to be:
‘… to provide a speedy and effective means of ensuring that progress payments are made during the course of the administration of a construction contract, without undue formality or resort to the law’.”
- importantly, the test for whether the payment claim complies with s. 68(1) does not direct the enquiry to whether or not, in hindsight, there has been a successful articulation of the work and the claim or the other criteria in s. 68(1). A document does not, for example, fail to be a payment claim within the meaning of the BIF Act merely because it can be seen after a full investigation of the facts and circumstances that it does not, for example, successfully identify all the construction work claimed;[28]
- there is no longer any requirement for a payment claim to be endorsed as having been made under the BIF Act,[29] contrary to the requirements under earlier Acts. The requirement for a payment claim to carry on its face that endorsement was removed upon the enactment of the BIF Act in November 2017;
- it can be accepted that there is a degree of formality required in a document to satisfy the requirements of the payment claim;
- the fact that an invoice does not need to expressly request payment, but is deemed to satisfy s. 68(1)(c), confirms that no formulaic words are required; the document is to be construed objectively as to whether it makes request for payment of the claimed amount;
- s. 68(1)(c) does not limit the description or content of the document;
- as a matter of statutory construction, there is no strict requirement for certain words to be used in a document for it to be a payment claim satisfying the criteria in s. 68(1);
- further, the Court should be careful not to set the bar too high in assessing what is required by s. 68(1):[30] an overly stringent, technical or strict approach to construing a payment claim and its compliance with s. 68(1) is not warranted;
- ss. 68(1)(a)-(c) do not require a payment claim to identify or state a due date for payment, given the first obligation is to either pay the amount claimed or deliver a payment schedule in response to the payment claim. Nor can such a requirement be implied by or imported from s. 68(1)(c), that simply provides that an invoice with a due date for payment is taken to satisfy the requirements of s. 75(1)(c) that the payment claim requests payment of the claimed amount.
- [37]The requirement that a payment claim ‘requests payment’ was recently considered in Iris Broadbeach[31] by Wilson J commencing at [126] where her Honour observed that a significant difference between the old Act and the BIF Act is that s. 68(1) of the BIF Act is no longer framed in mandatory terms. The legislature has removed the term ‘must’ from s. 68 in setting out what constitutes a payment claim. Wilson J found that a payment claim is not required to state the ‘amount due’ nor expressly include a request for payment if, construed objectively and as a whole, it requests payment of the claimed amount.[32] Nor is it required to identify a particular due date or timeframe for payment. Thus, forms other than a form of an invoice can be compliant.
Conclusion on Ground 1
- [38]I agree that variation 15 (the first document in time) is to be construed objectively, and not by reference to the Invoice that was emailed some three hours later by Kenik. It is not to the point that Kenik later delivered an Invoice that, it is accepted, satisfies the statutory criteria for a payment claim. The question is whether variation 15, given by Kenik first, did so and construed objectively may be considered to be a payment claim as reasonably understood by TPG.
- [39]In this case, there is a substantial difference between the variation claims and the Invoice such that, in my view, the recipient would have objectively and obviously considered there was only one payment claim. There was a pattern and course of conduct by the parties with respect to payment claims that would have made it obvious to TPG and any reasonable reader that the Invoice constituted a single claim and demand for payment incorporating the amounts set out in the variation claims.
- [40]But even considering variation 15 on its own, I would not conclude that objectively it was a payment claim. In reaching that conclusion I consider that it is particularly important that -
- it was described as a variation;
- it was followed within a short period of time by other variations;
- importantly, it did not demand payment, did not demand payment by any particular date and did not have any stated due date or timeframe for payment;
- it was in a substantially different form to earlier payment claims that had been made under the Contract.
- [41]Insofar as TPG relies upon the following points, I find as follows:
- TPG submits that the variation 15 claim was not accompanied by a supporting statement as provided in s. 75(7) is not relevant. Section 75(8) provides that the failure of the claimant to provide the payment claim with a supporting statement does not affect the validity of the payment claim and, further, is not a requirement for a payment claim found in s. 68(1). I find that the operation of s. 75(8) is plain, however that does not mean that non-compliance with s. 75(7) is not relevant. Instead it is a factor that can be taken into account and that I do take into account in concluding that variation 15 was not a payment claim;
- TPG submits there was no provision in the Contract for Kenik to submit such a variation claim. TPG says clause 36 of the Contract did not provide for such a claim and the variation 15 claim was therefore not one that appeared to be made, or which was contemplated as being made, under clause 36.[33] I find that clause 36 of the Contract was not exhaustive as to the issue of variations and so the apparently non-applicability of clause 36 to variation was of limited moment;
- TPG submits that accordingly, although the cover email and the document described it as a “variation claim” and “Variation 15”, that is not determinative. Further, TPG submits that Kenik’s subjective intention as to whether the variation 15 claim was intended to be a statutory payment claim is also irrelevant. I agree with both of those submissions;
- TPG submits that variation 15 was unlike previous variation approval documents that had passed between the parties.[34] Previously Kenik had submitted for variations 1-14 a “Contract Variation – Approval” form to be signed by both parties (and which had occurred). Those variation claims were all submitted in the one email communication with any supporting documents attached.[35] I agree that is a relevant factor, but it is not determinative;
- TPG submits that variation 15 does not state (and there was nothing to indicate in the covering email) that it would be followed by, or otherwise claimed in a subsequent Invoice or progress claim that would be delivered by Kenik. I agree. TPG submits that on its face, variation 15 appears to be a standalone claim asserting that Kenik is entitled to payment of a specific amount for undertaking the additional construction work under the Contract. In the circumstances I have described above, I do not agree. Objectively, it was giving notice of a variation claim, not making a claim for payment per se.
- [42]When the flurry of variation claims is considered, in my view objectively there could have been no doubt that no single one of the variation claim documents constituted a payment claim.
- [43]My preferred view is that just the Invoice was the payment claim. There is no issue that it satisfied the requirements of a payment claim. It was consistent with the form of earlier payment claims made.
- [44]Alternatively, I would conclude that the twelve documents ought be read together as the payment claim, the first eleven in effect being in support of the twelfth. That conclusion would make no difference to the outcome. In so concluding I note that previous cases dealing with single payment claims and multiple communications have involved situations where there is the provision of multiple invoices under the one communication (whether a cover letter, facsimile or email).[36] These authorities and the objective nature of the documents in each indicate that where multiple documents are sent as part of the one communication, they will often, but not necessarily always, constitute a single payment claim. It may also be accepted that where claims are sent under two separate emails, the wording in the emails or claims/invoices may indicate that they are intended to form part of a single payment claim. That may be contrasted where emails attaching discrete invoices or claims are sent separately and there is nothing on the face of those email communications to confirm that they are intended to constitute a single payment claim. Even though here there were multiple communications, not expressly cross-referenced, and the Invoice followed a number of hours after the flurry of variation claims, that is not determinative.
- [45]Nor is it determinative that Kenik could have easily submitted the variation documents as part of the one email communication with the Invoice, rather than separately preceding the Invoice. Nor is it determinative that there is no indication of an ongoing practice between the parties that variation claims would be sent separately to a progress claim but were treated by the parties as constituting part of the one progress claim.
- [46]In Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32, Douglas J found the separate claims argument unpersuasive, particularly as the document the contractor asserted to be the payment claim (relevantly being the first of 19 transmittals in that case) described itself as the payment claim and contained internal references to the subsequent claims.[37] His Honour adopted the approach taken in Alan Conolly & Co v Commercial Indemnity[38] that considered that the person receiving the payment claim would immediately be aware the contractor was claiming the total of the amount shown in all of the documents.[39] His Honour concluded that it was ‘doubly clear’ to the recipient of the documents because, on the face of the documents, the first document was described as a claim under the BIF Act and was itself a summary of the subsequent documents.
- [47]The case of Sought After Investments Pty Ltd v Unicus Homes Pty Ltd [2019] NSWSC 600 is also instructive. Ball J considered whether a letter that purported to enclose four separate payment claims constituted more than one payment claim in respect of the same reference date. In that decision, Ball J relevantly observed at [23]-[24]:
“…That question is to be resolved objectively taking into account all relevant matters, including the terms of the document, any covering letter and the surrounding circumstances known to both parties: Fernandes Construction Pty Ltd v Tahmoor Coal Pty Ltd (t/as Centennial Coal) [2007] NSWSC 381 (dealing with the question whether a single document was properly characterised as a payment claim); Leighton v Arogen [2012] NSWSC 1323.
…
Fourth, the form in which the claim or claims are made is relevant to the question whether there is one or more claims, but it is not determinative: see Alan Conolly & Co v Commercial Indemnity Pty Limited [2005] NSWSC 339. Also relevant to the question whether there is one or more payment claims is the purpose of the prohibition in s 13(5) of the Act. It is evident that the purpose of that provision is to prevent a principal from being vexed by having to deal with more than one progress claim (including any associated adjudication application) during the period between reference dates. Consequently, it is relevant to ask whether that policy will be subverted if multiple ‘claims’ are characterised as a single payment claim for the purposes of the Act.”
- [48]Notwithstanding that each of the documents attached to the letter were expressed to be a separate payment claim under the BIF Act, a feature absent in each of the variation claims here, his Honour considered there was only one payment claim made in respect of a single reference date.[40] That conclusion was reached upon the following observations (emphasis added):
“Unicus, particularly in its letter dated 14 February 2019, appears to have used ‘payment claim’ and ‘invoice’ interchangeably. The effect of the letter, though, is to enclose four invoices. Those invoices were reissued as payment claims, presumably in relation to a reference date that had arisen recently. Although expressed in the plural (‘claims’), the letter states that the due date for payment, despite what is said in the claims, is to be calculated from the date of the letter. Consequently, by its letter dated 14 February 2019, Unicus made a single demand for payment of the amounts stated in the enclosed invoices. The letter explained why four invoices or claims were included. The letter also it stated that Unicus awaited receipt of ‘payment in full’ or ‘your payment schedule’ (singular). Objectively, a recipient of that material must have understood that a single claim was being made for payment of the full amount of the four invoices, all of which were presented at the same time.
In my opinion, that characterisation is consistent with the purpose of s 13(5) of the SOP Act. Sought After Investments was notbeing vexed by multiple claims served at different times. From its point of view, there was no difference between receiving a single letter enclosing four invoices and a single document consolidating the four invoices or claims.
The fact that Sought After Investments chose to serve four documents each expressed to be a payment schedule in response to the claims does not alter the position. The objective character of the claims cannot be altered by Sought After Investments’ response to them. Sought After Investments’ response may provide some evidence of how a reasonable person would have understood the claims that were served on it. But in considering the weight to be attached to that evidence, it is necessary to bear in mind that Sought After Investments was plainly alert to the significance of there being four payment claims and it was in its interests to characterise the letter dated 14 February 2019 and its enclosures in that way. Given that, in my opinion little weight can be attached to its conduct.”
- [49]Similarly, in Modog Pty Ltd v ZS Constructions (Queenscliff) Pty Ltd [2019] NSWSC 1743, Henry J considered that four separate invoices constituted a single payment claim. Her Honour considered that the subsequent invoices were ‘more properly understood as supporting documents that provide further details’ of the claims identified in the payment claim proper and, ‘when viewed as a matter of substance rather than form’, there was only one payment claim made which comprised the total value of the various amounts listed in each of the separate documents that were forwarded later on the same day.[41] As Henry J observed at [79]:
“It is open to a claimant to submit one payment claim for the purposes of the SoP Act that comprises or refers to several invoices even though some or all of those invoices separately say they are a payment claim for the purposes of the Act: Rail Corporations of NSW v Nebax Constructions [2012] NSWSC 6, at [31]; Alan Conolly and Co v Commercial Indemnity [2005] NSWSC 339, at [23].”
Ground 2: dispute as to payments received
- [50]This ground is advanced by TPG in the circumstances where I have found against it on Ground 1.
- [51]In summary, TPG submits that the adjudicator committed jurisdictional error in deciding that loans or advances made by TPG to Kenik, and a payment made directly by a related party of TPG to Kenik, were not to be included in the amount paid to date. These amounts totalled a little over $2 million and if counted as payment made would have reduced the adjudicated amount by that sum. The jurisdictional error is alleged to be that, in respect of each payment:
- the adjudicator failed to consider submissions made by TPG based on uncontroverted evidence as to how the parties were to treat those payments (that is, the amounts were to be repaid by being offset against future progress payments under the Contract);
- there was a material denial of procedural fairness to TPG by the adjudicator determining the issues on grounds not contended for and in respect of which TPG was not given the opportunity to address.
Relevant facts
- [52]Kenik claimed a progress payment of $8,808,879.49 excluding GST in the payment claim. It identified that TPG had ‘paid to date’ the amount of $14,349,164.84 excluding GST.
- [53]TPG identified in the payment schedule a higher ‘paid to date’ amount of $19,347,791.16 excluding GST.
- [54]Kenik did not make any submissions in the adjudication application regarding the ‘paid to date’ amount. It could have done so.
- [55]TPG made submissions in the adjudication response in support of the higher ‘paid to date’ amount included in the payment schedule. An explanation for part of the difference between the parties concerned:
- advance payments made by TPG to Kenik in February and March 2023 in the amount of $1,022,987.80 (asserted by TPG to be loans to assist Kenik’s cashflow, made on account under clause 37.2 of the Contract) (TPG Advances);
- a payment in June 2022 of $1 million to Kenik by the Derek Lowe Superannuation Fund[42] (asserted by TPG to be also made to assist Kenik’s cashflow) (Lowe Payment).
- [56]The fact of those payments was not in issue.
- [57]TPG relied on the statutory declaration of Peter Henderson (a director of TPG). As to the TPG Advances, Mr Henderson:[43]
- explained each payment was made by way of loans made on account pursuant to clause 37.2 of the Contract (that is, advance payments on progress payments under the Contract) to assist Kenik with cashflow, thereby having ‘frontloaded’ payments to Kenik to assist with purchasing goods for the project that Kenik was not actually entitled to be paid until installed;
- those amounts were to be repaid by way of offset in future claims issued by Kenik throughout the course of the project.
- [58]As to the Lowe Payment, Mr Henderson evidenced the payment of $1 million made to Kenik direct from Derek Lowe Superannuation, that was to be treated as a payment by TPG to Kenik under the Contract.[44]
- [59]Mr Henderson also provided an Excel spreadsheet prepared by Kenik recording the TPG Advances and Lowe Payment that were there referred to as an "advance" and "Loan Taringa", which Mr Henderson said confirmed the payments and their treatment between the parties (Kenik Spreadsheet).
- [60]TPG also relied on the statutory declaration of Derek Lowe[45] that (consistent with Mr Henderson’s evidence) confirmed the Lowe Payment was, although paid directly to Kenik at Kenik’s request, a loan from TPG to assist Kenik with cashflow needs on the understanding that the loan would be paid by way of offset against future invoices.
- [61]TPG made submissions in the adjudication response:
- at [84]-[90], essentially repeating Mr Henderson’s evidence that the TPG Advances were payments made to assist Kenik with its cashflow needs to finance the purchase of large quantities of goods that could not be claimed under the Contract until later, following installation, consistent with payments on account in clause 37.2. TPG also submitted that that loan would be repaid by way of offset in future invoices. TPG also relied on the Kenik Spreadsheet as confirming the parties’ understanding that these were amounts owed by Kenik to TPG, to be treated as payments made on account by TPG to Kenik pursuant to clause 37.2 of the Contract;
- at [91]-[98], essentially repeating Mr Lowe’s and Mr Henderson’s evidence that, although the Lowe Superannuation Fund was not a party to the Contract, the Lowe Payment was a loan from TPG to Kenik and should be characterised as a payment by TPG to Kenik, again, to assist Kenik with cashflow on the understanding the loan would be repaid by way of offset. Again, the Kenik Spreadsheet was relied on as confirming this treatment of the Lowe Payment between Kenik and TPG.
- [62]The Decision shows that the adjudicator dealt with the TPG Advances and the Lowe Payment as issues regarding the amount paid to date in the following manner:
- at [64]-[66] of the Decision the adjudicator summarised the issues in dispute, in particular that TPG had previously paid $19,347,791.16 plus GST to Kenik;
- at [94]-[96] the adjudicator referred to the Lowe and Henderson declarations in passing when considering a different issue (Kenik’s allegations regarding estoppel by convention in respect of the direction of variations, recording Mr Henderson’s evidence (1) of the TPG Advances made to Kenik outside of progress claims on the understanding that such loans were to be repaid and (2) that “Mr Lowe provided a $1,000,000 loan to the claimant which was to be treated as a payment by the respondent to the claimant.”);
- at [405] onwards, by outlining the parties’ respective submissions regarding the payments made to date. At [408] the adjudicator recorded TPG’s submission that the amounts paid to Kenik to date included the TPG Advances and the Lowe Payment. Relevantly, at [414]-[415] the adjudicator summarised Mr Henderson’s evidence that the TPG Advances were loans or advances made for cashflow reasons. The adjudicator did not refer to Mr Henderson’s (or Mr Lowe’s) evidence that these payments were to be offset against future progress payments to Kenik;
- at [416] the adjudicator records Mr Henderson’s evidence of the Lowe Payment having been made to Kenik on behalf of TPG in respect of payment under the Contract and the Kenik Spreadsheet recording that loan. The adjudicator did not refer to Mr Lowe’s evidence or the evidence that these payments were to be repaid by way of offset against future invoices.
- [63]The adjudicator’s reasons in respect of these two payments are brief, at [421]-[423]:
- at [421] the adjudicator refused to include the Lowe Payment as part of the amount paid to date because it “does not involve both parties to this contract so was not made pursuant to the contract. As such it is excluded from the ambit of this adjudication and my jurisdiction”;
- at [422]-[423] the adjudicator also rejected including the TPG Advances as part of the amount paid to date:
“422. The amounts paid as loans by the respondent to the claimant do have some merit, particularly as they fit with the claimant’s narrative that certain works varied under the contract, such as the external works, were to be paid for outside of the progress payments at a later date which the claimant says was done to keep information from the respondent’s funder. This point is also made by Mr Henderson in his declaration[46] albeit for different reasons. Doc 22 also shows that the parties discussed loans as part of the payments under the contract, however, there is no information on the repayment terms of these loans and how they fit in with the contract payment mechanisms.
- If I were to include these amounts in the total amount for the previous paid under the contract, it may also be reclaimed under the terms of the loan agreement, with the consequence that it could be recouped twice. Consequently, I have not included it in my assessment of the previous paid amount as it is a separate issue that should be dealt with outside of the contract under its own dispute mechanism.”
Preliminary finding regarding new reasons
- [64]As a preliminary matter relating to this ground, I reject the submission of Kenik that the adjudicator ought to have disregarded all of TPG’s submissions in relation to the TPG Advances and the Lowe Payment pursuant to s. 88(3)(b) of the BIF Act. Kenik submitted that such submissions were not properly made for the purposes of s. 88(2)(d) of the BIF Act as they were new reasons not included in the payment schedule.[47]
- [65]First, I acknowledge that in GW Enterprises Pty Ltd v Xentex Industries Pty Ltd [2006] QSC 399, Lyons J observed at [37] that: “it is imperative that any reasons for withholding payment must be raised in the payment schedule or they cannot be raised at all”. I note that the payment schedule stated: “The reasons why the amount proposed to be paid is less than the amounts claimed by Kenik are set out in the table below and Annexure A in respect of each claimed item.”[48] I further note that the payment schedule did not in express terms identify why there was a difference between the amount paid to date that was scheduled as compared to that in the payment claim. However, there was plainly a difference in the amounts ‘paid to date’ and Kenik had an opportunity to address that difference in its adjudication application. TPG was at liberty to explain in its adjudication response why the amounts paid to date differed, and it did so. There is no error in the approach of the adjudicator.
- [66]Second, it is uncontroversial that whether or not a submission is properly made is something within the adjudicator’s jurisdiction to determine.[49] That is what the adjudicator did here, in rejecting Kenik’s contention that these submissions were new reasons, as was within her jurisdiction. Even if she were wrong, that error was not a reviewable jurisdictional error.
Relevant law - failure to consider required matters
- [67]The summary that follows is relevant to the ground mentioned at [(a)] above.
- [68]Adjudicators do not have to get the answer right; they must simply demonstrate that they have actively engaged with the issues and the submissions as required by the BIF Act. The obligation “to consider” certain matters and disregard others is a requirement on which the valid exercise of an adjudicator’s jurisdiction is conditioned.[50]
- [69]Mindful of warnings about putting gloss on the statutory obligation to consider, such as whether the adjudicator “actively “ or “intellectually engaged” with TPG’s submissions in question or whether the reasons reveal “no intellectual justification” for the decision, the question is whether the adjudicator arrived at her conclusion by a process that failed to consider a respondent’s payment schedule, submissions and relevant documents as required by s 88(2)(d).[51] In a contested adjudication,[52] merely reciting or referring to a part of a party’s submissions or evidence, without more, often does not demonstrate the adjudicator has discharged the statutory obligation to consider.
- [70]The importance of the submission to determination of the issue, how clearly the issue is raised in a party’s submission, the adjudicator’s discussion of those submissions and the adjudicator’s decision and reasoning on that issue are all factors to be assessed by the court.[53] Assessment of these factors should also take into account the often voluminous submissions received by the adjudicator and the timelines under which they operate.
- [71]It may be accepted that the mere failure to identify a particular submission in reasons does not, of itself, usually demonstrate that the adjudicator failed to consider that submission.
- [72]In Ceerose Pty Ltd v A-Civil Aust Pty Ltd (Ceerose)[54] the NSW Court of Appeal observed that the question as to whether an adjudicator has considered the matters prescribed by the legislation:
“…will involve an inquiry into the private processes of decision- making, and even the mental processes of the adjudicator. While those processes may be revealed by the reasons required to be given under s 22(3), those reasons will not necessarily demonstrate a negative proposition, namely a failure to consider a particular matter required to be considered simply because it is not referred to in the reasons.”
- [73]The scope of the duty to consider material is determined by reference to the mandatory considerations of s. 88(2) of the BIF Act: namely, the relevant provisions of the BIF Act, the relevant construction contract, the payment claim, the payment schedule and each party’s properly made submissions.
- [74]There are many errors of fact and law which might be made by an adjudicator that would not be regarded as going to jurisdiction.[55]
- [75]As recently observed in Niclin Constructions Pty Ltd v Robotic Steel Fabric Pty Ltd (Niclin Constructions):[56]
“There is an important distinction between procedural fairness and the question of whether an adjudicator has considered a matter that a provision like s 88(2) requires the adjudicator to consider. The distinction was identified by the New South Wales Court of Appeal in Ceerose Pty Ltd v A-Civil Aust Pty Ltd:[57]
‘Because procedural fairness is concerned with the conduct of the adjudicator towards the parties, once it is established what fairness requires in a particular case, the question of compliance will be readily determined by the objective facts, being primarily the communications, or lack of them, between the adjudicator and the parties. By contrast, the question whether the adjudicator has considered a matter for the purposes of s 22(2) will involve an inquiry into the private processes of decision-making, and even the mental processes of the adjudicator. While those processes may be revealed by the reasons required to be given under s 22(3), those reasons will not necessarily demonstrate a negative proposition, namely a failure to consider a particular matter required to be considered simply because it is not referred to in the reasons’.”
- [76]In Niclin Constructions, Applegarth J succinctly summarised relevant principles regarding the relationship between an adjudicator’s obligation to consider relevant matters and their reasons, at [26]-[31]:
“[26]Purported reasons may be so deficient that they do not constitute “reasons” within the meaning of s 88(5)(b). The adequacy of reasons is a different matter. The inadequacy of reasons does not of itself amount to jurisdictional error.[58] As Brereton J observed in City of Ryde v AMFM Constructions Pty Ltd:
‘The significance of the reasons, or their inadequacy, is that in the context of the surrounding material they may reveal jurisdictional error, or that the adjudicator has not performed the task of determining an adjudicated amount by reference to the specified relevant factors in accordance with … the Act.’
- [27]There have been many formulations in different contexts, including adjudications under legislation similar to the Act, about when deficient reasons may justify a conclusion of jurisdictional error.[59]
- [28]In general terms, there is a dividing line between a deficiency of reasons that demonstrates that the adjudicator has not performed the decision-making task in compliance with the Act and a deficiency in reasons that does not. On which side of the dividing line certain reasons fall depends on the context. The adequacy of reasons is assessed in the context of an Act under which adjudicators provide their determinations in a “somewhat pressure cooker environment”.[60]
- [29]Within that statutory context there are a wide variety of including complex questions of fact that may require an adjudicator to briefly explain why one party’s evidence was preferred over another. Depending upon the circumstances, it may be sufficient if the reasons indicate why the adjudicator arrived at the decision . In other cases the reasons may in all the circumstances reveal a failure to consider submissions. They may reveal ‘no intellectual justification’ for the decision that was made.[61]That said, ‘intellectual justification’ is a gloss on the duty ‘to consider’ and courts, including the High Court, have warned about the use of that label.[62]
- [30]A question may arise as to what specific inference is to be drawn from the absence of reference to a particular submission or contention in the adjudicator’s reasons. Payne JA in Ceerose recently explained:[63]
‘There are a range of possible explanations, only one of which is that the material was not considered. Another is that the claim was readily seen to be well-founded and the submissions to the contrary as lacking in substance. However, the latter would be a good reason to omit reference to the issue in the reasons. If the submission had been misunderstood, the facts mistaken or the law wrongly identified, that might explain absence from the reasons of something expected to be addressed, but not lack of consideration. Of course, the duty to consider a submission is separate from the absence of any duty to deal with it correctly, whether in law or in fact. The point is rather that an unreviewable error may explain why the reasons do not advert to a particular matter.’
- [31]The fact that an adjudicator does not refer in reasons to all of the submissions made on an issue does not necessarily mean that he or she did not consider them.”[64]
- [77]Thus, while there may be few cases in which the breach of the duty to consider required matters is made out, that is not to say that there may not be circumstances in which the inference of omission to consider is demonstrated. Failure to refer to a submission on a centrally important matter, clearly articulated and based on uncontested facts, may demonstrate a failure to consider at all.[65]
Conclusion regarding alleged failure to consider required matters
TPG Advances
- [78]It is not asserted by TPG that the adjudicator failed to consider all of TPG’s submissions and relevant documents on the issue concerning the TPG Advances. Instead it is submitted by TPG that the adjudicator’s reasons were required to identify and address TPG’s submission about the TPG Advances, being a centrally important matter, particularly where that was clearly articulated and based on uncontested facts.[66] TPG submits that the adjudicator did not do that here, thereby demonstrating a failure to consider TPG submissions.
- [79]TPG submits that there were three key elements to TPG submissions regarding the TPG Advances:
- that the payments were made by TPG to Kenik (which was implicitly accepted by the adjudicator[67]);
- the loans were advance payments made outside of progress payments, to assist Kenik’s cashflow and in purchasing goods that Kenik would later be entitled to payment for upon installation;
- the loans were paid on account pursuant to clause 37.2 of the Contract, to be repaid by being offset against future progress payments to Kenik under the Contract.
- [80]
- [81]TPG submits that the adjudicator did not refer at all to the third key element of TPG submissions, that was clearly articulated in Mr Henderson’s declaration and TPG’s submissions at [86] and [90]. TPG asks for a specific inference to be drawn from this absence of reference that the adjudicator failed to consider that submission. It says that the inference can also be supported by the adjudicator’s finding at [422] that “there was no information on the repayment terms of these loans and how they fit in with the contract payment mechanisms” in that such a finding demonstrates that the adjudicator did not determine this issue affecting the amount paid to date, and thereby the adjudicated amount, by reference to TPG’s repeated submission as to the relationship of those payments the contract payment mechanism and how those amounts were to be repaid.[69] This was not a mere misinterpretation or misunderstanding of TPG’s submissions and evidence, rather, TPG submits that the adjudicator’s reasons do not reflect a genuine consideration of those submissions.[70] TPG submits that the circumstances are analogous to those in Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd[71] where A Lyons J (as her Honour then was) found that, although the adjudicator may have read the respondent’s submissions at some point in time, “when it came to the actual point of decision making he did not ‘consider’ them because he did not actively take them into his reasoning process and weigh them up along with the other evidence he was considering at that point in time.”[72] It was in these circumstances, that it was held that the decision was affected by jurisdictional error in that the adjudicator had failed to properly exercise his power in accordance with the Act.[73]
- [82]I am not prepared to make the inference submitted for by TPG. To draw such an inference in my view would be to review the Decision with “an eye keenly attuned to the perception of error”[74] which is not consistent with the BIF Act.
- [83]There are a number of reasons why an adjudicator may fail to refer to a particular submission or a piece of evidence, only one of which is that the submission or material was not considered.[75] In this case:
- the Adjudication Application and Adjudication Response comprised 1,929 files for the adjudicator to review, according to TPG’s solicitors;[76]
- the Adjudicator reviewed the Henderson declaration and summarised it in her reasons;[77]
- the Adjudicator reviewed the reference documents such as the invoices and bank statements referred to her by TPG and prepared her own record of all payments she was able to identify;[78]
- the Adjudicator ultimately accepted TPG’s submission that the previously paid amount was higher than that identified by Kenik in its Payment Claim (the adjudicator finding that the previously paid amount was $16,293,403.52 excluding GST[79] rather than $14,349,164.84 excluding GST, being the amount previously certified by TPG in payment certificate 26 signed by the Superintendent on 20 April 2023)[80];
- the Adjudication Determination comprised 479 paragraphs over 83 pages of reasoning, it cannot be said that the Adjudicator failed to consider submissions or evidence in any of the ways identified by Bond J in Acciona.
- [84]I do not therefore consider that the adjudicator’s reasons are so deficient as to justify a conclusion of jurisdictional error. Insofar as the adjudicator may have erred in concluding that there was no evidence on a particular point, in this case that is an error within jurisdiction. I am not persuaded that the adjudicator has failed to perform the decision-making task in compliance with the Act.
Lowe Payment
- [85]The adjudicator refused to include this amount as part of the ‘amounts paid to date’ on the basis that the payment does not involve both parties to the Contract and so was outside of her jurisdiction. I do not agree with TPG’s submissions that such a conclusion demonstrates a failure to consider TPG submissions. It merely demonstrates that she rejected TPG submissions about how the payment was to be dealt with.
- [86]The adjudicator referred at [95]-[96] of the Decision to Mr Henderson’s evidence that the Lowe Payment was to be treated as a payment by TPG to Kenik. However, the adjudicator’s reasons at [421] for deciding the Lowe Payment was not to be included in the amount paid to date was on the basis that the payment “does not involve both parties to this contract so is not made pursuant to the contract”. That the reasons provided were brief, and did not make reference to Mr Lowe’s evidence or the Kenik Spreadsheet confirming the Lowe Payment as a loan between TPG and Kenik, is not to the point. The findings made were available upon a proper consideration of TPG’s evidence and submissions. Th adjudicator was not obliged to accept evidence or submissions from TPG merely because it was uncontroverted in express terms.
- [87]I am not persuaded that the adjudicator failed to perform the decision-making task in compliance with the Act in respect of the Lowe Payment.
- [88]In my view, the Decision demonstrates a sufficient consideration of each of the matters required to be considered. The adjudicator actively considered the issues and material concerning payments by TPG to Kenik as potentially offsetting some of the Payment Claim particularly at [405]-[425] of the Decision.
Relevant law - denial of natural justice by adjudicator
- [89]The summary that follows is relevant to the ground mentioned at [(b)] above.
- [90]There is a substantial denial of natural justice where an adjudicator decides a dispute on a basis for which neither party has contended, unless it can be said that no submission could have been made to the adjudicator which might have produced a different result.[81] In John Holland Pty Ltd v TAC Pacific Pty Ltd, Applegarth J put the matter in this way:[82]
“The issue of natural justice relates to the condition upon which the adjudicator exercised his powers, as distinct from the result he reached and the insulation of that result from review for error of law. John Holland was not given an opportunity to make submissions to the adjudicator that the view he proposed to take about the law was wrong, and to thereby avoid legal error. The statutory scheme may permit an adjudicator to make unreviewable errors of law in quickly deciding complex legal issues in adjudications of the present kind after considering the parties’ submissions. The statutory scheme does not permit an adjudicator to determine an adjudication on the basis of a view of the law for which neither party has contended. An adjudicator may be free, as it were, to make an unreviewable error of law based on the submissions of one of the parties. He should not be so free where the error is all his own work and might have been avoided by affording natural justice.”
- [91]It is unnecessary for the person alleging a substantial denial of natural justice to demonstrate that, if given the opportunity to address the adjudicator’s proposed reasoning, they would have persuaded them otherwise. It is sufficient that there by “something to be put that might well persuade the adjudicator to change his or her mind”.[83] The question of jurisdictional error arising from a denial of procedural fairness thereby focusses on the procedure, rather than the result. The result is irrelevant unless it can be established that no submission could have been made that may have changed the decision, which will be a rarity.[84]
- [92]There are not a large number of cases in which it has been found that an adjudicator failed to afford procedural fairness to the parties. The reasons for this were observed by the High Court in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd.[85] In Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2010] QSC 95 (upheld on appeal),[86] Martin J (as his Honour then was) observed:[87]
“To establish that there has been a lack of bona fides or a denial of natural justice is not an easy task. This was a complicated matter in which there was a substantial amount of material all of which needed to be considered and resolved within a limited period of time. The arbitrator did not accept much of what Northbuild said but I do not accept that in doing so he exhibited any lack of bona fides or failed to afford natural justice to Northbuild.”
Conclusion regarding alleged denial of natural justice by adjudicator
TPG Advances
- [93]Reasons given by the adjudicator for finding that the TPG Advances were not to be included in the amount paid to date included:
- as identified above, that there was “no information on the repayment terms of those loans and how they fit in with the contract payment mechanisms”;
- further, that those amounts “may also be reclaimed under the terms of the loan agreement, with the consequence that it could be recouped twice” and should be dealt with under the loans’ “own dispute mechanism”.
- [94]TPG submits that those findings, were not matters raised by Kenik and were not contended for by TPG, nor could they reasonably have been anticipated by TPG.[88]
- [95]I do not consider therefore that the adjudicator was obliged, if she were minded to exclude the TPG Advances from the amount paid to date on the basis she identified, to provide TPG with the opportunity to address that particular reasoning.[89] In respect of (a), that conclusion simply seems to be wrong because TPG had sought in its material to address those issues. But the error is non-jurisdictional. In respect of (b), that was mere speculation by the adjudicator and again, in so far as it was misplaced, was an error of the non-jurisdictional type.
- [96]In respect of both (a) and (b), nor do I think there were substantial submissions that TPG could have made that would have advanced the position beyond what was already contained in the adjudication material in that:
- there was already evidence before her in Mr Henderson’s declaration and TPG submissions as to how those loans were to be repaid under the contractual progress payment mechanisms;
- there was already submissions before her that the TPG Advances formed part of the broader arrangement between the parties.
- [97]Nor would it have been to the point that because the Contract had been terminated, that the payment claim relied on by Kenik would be the final claim being made by Kenik and so that provided the final opportunity for TPG to offset the TPG Advances against any amount payable to Kenik.
- [98]I do not consider that there was a denial of procedural fairness, and if there was I do not consider it was material to the Decision on this issue.
Lowe Payment
- [99]Similarly, TPG submits that the adjudicator decided the Lowe Payment was not to be included as part of the amount paid to date on the basis not contended for. TPG submits that the adjudicator did not alert TPG to the possibility that she would decide the matter based on the view that the payment was outside the Contract and, consequently, the adjudicator’s jurisdiction.
- [100]I do not consider that there was any denial of natural justice in the adjudicator failing to expressly do so. She was required to apply the Contract. TPG had made submissions as to why the Lowe Payment was to be included in the calculation of the amount due under the Contract, the adjudicator rejected those submissions. She was not required to give TPG a further opportunity to explain why the Lowe Payment should be taken into account.
- [101]Nor do I think there were substantial submissions that TPG could have made that would have advanced the position beyond what was already contained in the adjudication material. I note that an adjudicator is not bound to call for further submissions nor does it matter why an adjudicator does not do so.[90] It is not open to the court to criticise an adjudicator for failing to seek further submissions in light of the short timeframes afforded to an adjudicator and the object of the legislation, being a speedy resolution of progress claims on what may often be a ‘rough and ready’ approach.[91]
Effect of the above findings in relation to Ground 2
- [102]Given I have found that the Decision is not affected by jurisdictional error in respect of Ground 2, the occasion to consider the application of the severance provision of the BIF Act (s. 101(4)) does not arise.
- [103]Lest it be helpful for the parties though, I note that I consider it plain that severance could have been practically achieved in this case. Severance is not impossible merely if the jurisdictional error concerns the adjudicator’s decision to disallow a set off or deduction against the claimed progress payment. The approach of Bond J in Acciona should be applied. The “decision” referred to in s. 101(4) is the decision in s. 88(1) about the amount of the progress payment, if any, to be paid by a respondent to a claimant, the date upon which it becomes due and payable, and the rate of interest, stating at [85]:[92]
“In this context, the decision referred to in s 101(4) is the adjudicator’s decision referred to in s 88. It is the decision of the amount of the progress payment, if any, to be paid by a respondent to a claimant, the date upon which it becomes due and payable, and the rate of interest: s 88(1). Section 101(4) evidently contemplates that the decision as to the amount of a progress payment under a construction contract may have been comprised of decisions as to the merit of a number of component parts. It is obvious why that may be so: the determination of the amount of a progress claim under a construction contract often involves making decisions about a multiplicity of claims, both positive and negative. And in working out what are the component parts in any particular case, it is notable that the adjudicator’s decision includes the reasons for the decision: s 88(5).”
- [104]I would adopt the principles expressed by Bond J governing the exercise of the power under s. 101(4) in Acciona at [80]-[91]:
- s. 101(4) should be construed as conferring the power to make orders that are reasonably required or legally necessary to achieve the outcome of allowing the part of an adjudicator’s decision not affected by jurisdictional error to remain binding on the parties to the proceeding, by reference to the touchtone of reasonableness;
- the remedial nature of the power suggests that a beneficial approach should be taken to the determination of what is reasonably required or legally necessary in order to allow a relevant part of an adjudicator’s decision to remain binding;
- this impliedly carries with it the power to alter the “adjudicated amount” to accord with the part of the decision which the court decided to allow to remain binding.
Ground 3: entitlement under Contract or otherwise
- [105]In summary, in relation to Ground 3, TPG alleges that the adjudicator allowed variation claims for works performed prior to the Contract termination pursuant to ss. 67(2) and 70 of the BIF Act, rather than pursuant to an entitlement to be paid for those works under the Contract. In so doing it is alleged that the adjudicator disregarded a jurisdictional limitation by allowing the claim as one that arose pursuant to the BIF Act rather than the Contract, and thereby committed jurisdictional error. That is, what the parties are in dispute about is whether the adjudicator did in fact purport to rely upon a contractual entitlement to payment in respect of the variations or some entitlement outside of the Contract.
Relevant law
- [106]There does not appear to be any dispute between the parties that:
- the BIF Act does not create a right to remuneration for construction work: that right is created by the construction contract;[93]
- it is not usually jurisdictional error for an adjudicator to misconstrue or misapply a relevant contractual provision;[94]
- it may be jurisdictional error for an adjudicator to misconstrue the contract to create an entitlement where one does not exist in the way described by Muir JA (with whom Holmes JA and Lyons J agreed)[95] in BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd[96] (citations omitted):
“[29]Here the error was jurisdictional because the adjudicator disregarded a limitation on his functions and powers. He could not award an amount for the latent condition unless there was an entitlement to be paid for that under the contract. An entitlement to be paid could only arise by the mechanism set out in cl 26.3. The parties did not meet to negotiate and the matter was not referred to an independent expert for determination. These requirements were not steps in assessing an entitlement conferred under the contract. Compliance with cl 26.3 was a precondition to the adjudicator having jurisdiction to award a sum at all. Also, the extent of an adjudicator’s jurisdiction on matters of law is, at best, limited. Bodies other than courts do not have power to authoritatively determine questions of law or make decisions other than in accordance with law, subject to contrary intent in the statute creating the body.
[30]As BGC could have no entitlement to payment in respect of the alleged latent condition until the requirements of cl 26.3 were fulfilled, the adjudicator committed a jurisdictional error in making the award by disregarding a limitation on his function and powers. The award effectively created a right, rather than assessing a right that existed under the contract. Contrary to the findings of the primary judge, the adjudicator’s error was not one made “in the course of the decision-making process itself based on what the adjudicator considered to be the true construction of the contract and the true merits of the claim” and thus not a jurisdictional error even if the adjudicator’s construction was wrong. If BMA’s construction of cl 26.3 and cl 37 of the contract is accepted, the adjudicator necessarily assessed the progress payment other than by reference to the terms of the contract.”
- accordingly, a relevant contractual entitlement should be identified:[97] a failure to do so may be jurisdictional error in the sense described by McMurdo J (as his Honour then was) in Northbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty Ltd:[98]
“[29]To determine an application, an adjudicator must identify the relevant terms of the contract upon which the claim is made and then apply the facts, as he or she finds them to be, to those terms upon their proper interpretation. The identification of the terms and the interpretation of those terms are thereby questions which the adjudicator must answer in the exercise of his jurisdiction. It follows that an error in the identification of the terms or in their interpretation will not be a jurisdictional error: Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd;[99] Clyde Bergemann Senior Thermal Pty Ltd v Varley Power Services Pty Ltd;[100] BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd.”[101]
- however, where it appears that an adjudicator is not meaning to apply the contract, as they interpret it, but is instead allowing the claim upon some other basis, the position is different, because the adjudicator is thereby misunderstanding the scope of the adjudicator’s jurisdiction. An example is the allowance for termination costs in BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd, which Applegarth J held was the result of a jurisdictional error, a conclusion which the parties accepted on the arguing of the appeal.
Relevant facts
- [107]Kenik submitted that it was not required to obtain a direction from TPG before carrying out additional works to have an entitlement to payment for that work. It contended that TPG was estopped from relying on the terms of clause 36.1 of the Contract, requiring a prior written variation direction and, rather, on the basis of an estoppel by convention, Kenik expected a written approval including the written variation direction to be issued after the variation claim had been submitted.[102] There was not, however, any provision in clause 36 of the Contract (variations) for such a variation claim to be submitted by Kenik. However, the basis for Kenik’s contention was that the entitlement accrued upon the making of that variation claim, that the superintendent was estopped from refusing.
- [108]The adjudicator considered “the only reason the claimant will undertake the additional work scope as if it had made an assumption that it would actually be paid for doing so”[103] and concluded at [118]: “I do not accept the lack of a written direction is a valid reason for withholding payment in the claimant is entitled to rely on the established course of conduct between the parties in respect of variation approval.”
- [109]The parties proceeded on the basis that the Contract was terminated and TPG contended that variation rights did not survive termination, so Kenik was not entitled to new variations. The adjudicator considered that the variation claims were not for new works arising since termination and concluded (emphasis added):
“147. I agree with the respondent that no new works can be provided after termination of a contract, but where the claimant is claiming for works already completed prior to the termination date, a right to payment for this arises under the Act.
- I decide that the claimant is entitled to claim for valid variation works it performed prior to contract termination pursuant to sections 67(2) and 70 of the Act.”
Conclusion on Ground 3
- [110]I do not accept TPG’s submissions that the adjudicator did not determine that the entitlement to payment for the variation claims arose under the Contract but instead determined that Kenik’s entitlement arose pursuant to the BIF Act. That is a misconstruction of the Decision.
- [111]
“Summary
- I decide that the elements for estoppel by convention have been met and that the respondent is estopped from relying on strict compliance with the requirement for a written direction under clause 36.1 of the contract.
- Accordingly, I do not accept the lack of a written variation direction as a valid reason for withholding payment and the claimant is entitled to rely on the established course of conduct between the parties in respect of variation approval.”
- [112]It was clear that TPG’s argument was that Kenik was not entitled under the Contract to be paid for the variations as there had not been strict compliance with the Contract terms. The adjudicator’s finding (that strict compliance was not necessary) meant that Kenik was so entitled under the Contract despite not strictly complying with the Contract terms. If the adjudicator truly considered the entitlement to payment arose under the BIF Act, she would not have considered the parties’ conduct in respect of the Contract said to give rise to an estoppel by convention.
- [113]As to TPG’s arguments regarding the survival or otherwise of rights to payment for variation works, the adjudicator accepted that no new variation works could be performed after termination, but that Kenik was entitled to be paid for works undertaken before the Contract was terminated.[106] That is clearly the correct position. The adjudicator said that such entitlement to be paid for the works carried out prior to termination was “pursuant to sections 67(2) and 70 of the Act”.[107] Importantly, section 70 of the BIF Act provides (emphasis added):
“From each reference date under a construction contract, a person is entitled to a progress payment if the person has carried out construction work, or supplied related goods and services, under the contract.”
- [114]By referencing section 70 of the BIF Act, the adjudicator indicated that she considered there was an entitlement to a progress payment in respect of the variation works carried out under the Contract. In doing so, the adjudicator was not making a finding that the entitlement to be paid for the variation claims arose under the BIF Act.
- [115]I do not accept that the adjudicator was allowing the claim upon some other basis than by applying the Contract. There is no jurisdictional error. The case is distinguishable from BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd. Here the adjudicator was meaning to apply the Contract.
Ground 4: denial of natural justice regarding preliminaries
- [116]In respect of Ground 4, in summary, TPG submits that it was materially denied procedural fairness in the manner in which the adjudicator determined the methodology and percentage of the amount for preliminary costs as part of variations claimed by Kenik. TPG submits the adjudicator allowed the claim on a ground that was not contended for by either party. The complaint particularly concerned the appropriate preliminaries[108] rate to be applied to the valuation of the Kenik’s variation claim 16.
Relevant facts
- [117]As variation claim 16 included a claim for an extension of time, Kenik sought payment for the additional indirect costs it incurred during the extended time it was required to be on site (extra costs in relation to things such as office wages, cleaning, site supervision, etc). On the face of the payment claim and the adjudication application, Kenik claimed between 18% and 20% for preliminaries in respect of each of the components of variation claim 16, as identified by TPG in the table in [166] of its outline of submissions in this proceeding.
- [118]By the payment schedule and adjudication response, TPG assessed variation claim 16 at $nil and asserted that Kenik had no entitlement to any costs in respect of variation claim 16. It did so under the heading “V16” in the payment schedule where it stated Kenik’s claim “does not adequately detail or evidence… the costs of each particular item of work so TPG is entirely unable to determine whether any such costs are costs which are payable under the Contract.” TPG thereby put in dispute the identification and substantiation of the costs claimed by Kenik for each item of work in variation claim 16.
- [119]Further in the adjudication response as to the appropriate amount payable for preliminaries if the adjudicator determined TPG was liable for claims made under variation claim 16, TPG contended that the amount payable for preliminaries was nil for each element of the variation claim 16 (see [163]-[164] of TPG’s outline of submissions in this proceeding). TPG valued (in Mr Thompson’s report) each part of the variation claim, including by reference to whether preliminaries were included in the assessed amount. The assessed amount was nil.
- [120]In the Decision the adjudicator determined that the appropriate rate for the preliminaries component of the variation claims was 10.27%, determined by reference to how the parties had agreed to pay for preliminaries as part of the contract scope of works, as follows:[109]
- the total contract price (items 1 to 23, being both direct costs and indirect costs) identified in payment claim 31 was $13,629,853;[110]
- as part of that value, $1,399,572 was attributed to preliminaries in payment claim 31;
- as a percentage of the total contract price, the preliminaries constituted 10.27% of the total contract price.
- [121]Accordingly, as part of the assessment of the value of variation claim 16 (which was comprised of twelve different claims for external works) the adjudicator determined the amount of preliminaries costs that Kenik was entitled to, consistent with the percentage calculated above, upon the adjudicator determining entitlement to the variation claim.
- [122]That determination was different (and less) to what Kenik had claimed. For example, Kenik had claimed 20% of the total claimed variation 16.1 (and approximately similar percentages/values for each of the other elements of the variation claim 16) in the document emailed on 8 September 2023, which had claimed the total amount of that variation in the same value as was included in the Payment Claim.[111]
- [123]Kenik did not make any submissions in the adjudication application regarding either the quantum or valuation of (that is, an appropriate percentage to be applied) the preliminary costs claimed as part of variation claim 16. It did not provide any substantiation for the percentage margin claimed for preliminaries in each variation 16 claim.
- [124]TPG submitted in [204] of the adjudication response that variation claim 16 should be valued in accordance with the expert report of Gary Thompson, which was a quantity surveyor report included in the adjudication response.[112]
- [125]At [169] of the Thompson report, he opined in relation to variation claim 16.1 that “Furthermore, Preliminaries are not considered within this Variation as Delay Rates account for this provision.” That reasoning was applied by Thompson to the claim for preliminaries in other parts of variation claim 16 and he assessed the valuation of preliminaries for each part at nil, in particular in a summary table at [216] where Thompson specifically confirmed his valuation of each claim within variation claim 16 and specifically confirmed his opinion that no preliminaries should be included in the valuation of each claim.
- [126]The adjudicator applied the same percentage (10.27%) of the total value of each claim within variation claim 16, despite Kenik claiming varying percentages of the value of each variation as preliminaries and TPG disputing that there should be any valuation of preliminaries as part of the valuation of variation claim 16.
Relevant law – denial of natural justice
- [127]The relevant law concerning material denial of natural justice has been referred to earlier in these reasons.
Conclusion on Ground 4
- [128]I do not agree with TPG’s submissions that the adjudicator was obliged, if she were minded to value the cost of preliminaries as part of the claims in variation claim 16 by reference to the value of preliminaries as part of the original contract price, to provide the parties with the opportunity to address that particular reasoning.[113] The assessment made by the adjudicator was reasonable, consistent with the pricing mechanism for variations in clause 36.4 of the Contract[114] and it was within the adjudicator’s jurisdiction to interpret and apply the Contract.
- [129]The fact is that TPG had an opportunity to advance an alternative argument in the event the adjudicator decided to reject its position that no preliminaries were payable. It chose not to make any submission in its adjudication response submissions as to the appropriate rate for preliminaries in respect of Kenik’s variation claims other than what was set out in the Thompson report that was not accepted by the adjudicator. The adjudicator was not obliged to call for further submissions. There was no denial of natural justice.
Subcontractors’ charges
- [130]TPG has received six notices of claim under Chapter 4 of the BIF Act to the total value of $769,690.04 (the Subcontractors’ Charges) and one payment withholding request under s. 97B of the BIF Act to the value of $33,577.12 (the Payment Withholding Request) – for a total of $803,267.16. TPG is obliged to retain or otherwise secure those amounts.
- [131]It is noted that the recipient of a subcontractor’s charge may pay the money the subject of the charge into court to discharge any liability in relation to the amount charged.[115] It is further noted that the BIF Act does not entitle the recipient of a payment withholding request to pay into court the value of the request (in the same way a recipient of a subcontractor’s charge is entitled to do). That does not mean that the court in certain circumstances might not be prepared to hold the value of the request as a payment in court until claims upon the monies are resolved.
- [132]Subject to the outstanding issue of TPG’s stay application being resolved, to appropriately deal with potential other claims on the monies in court, I will not release the amount of the Subcontractors’ Charges and Payment Withholding Request out of the monies paid into court by TPG that would otherwise be releasable to Kenik.
Stay
- [133]The consequence of the above findings, except for the outstanding stay application, is that I would order payment of the monies held in court to Kenik less $803,267.16 to continue to be held in court at the present time.
- [134]I will hear from the parties as to directions to have the stay application heard and finalised as soon as possible.
Outcome
- [135]I dismiss paragraphs 2 and 3 of the originating application. I will make further directions and set a further hearing date in relation to paragraphs 4 to 6 of the originating application. For the moment I propose to reserve costs until the stay application is determined.
Footnotes
[1] Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2012] 1 Qd R 525, 550-556 [67]-[80] per White JA (McMurdo P and Chesterman JA agreeing).
[2] Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2023] QSC 290 (Iris Broadbeach), [14]-[16].
[3] (2018) 264 CLR 1.
[4] See, for example, Total Lifestyle Windows Pty Ltd v Aniko Constructions Pty Ltd [2021] QSC 92 per Martin J (as he then was), [12]-[14]; SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307, [10], [31].
[5] Doyle, ex BJD-3.
[6] Doyle, ex BJD-3, p. 73.
[7] Doyle, ex BJD-3, pp. 73, 89.
[8] [11.1] of the adjudication application submissions, Doyle, ex BJD-4, pp. 178-179; [25] of the adjudication response submissions, Doyle, ex BJD-7, p. 445.
[9] Henderson, [28]-[49] and ex PJH-1, pp. 113-210.
[10] Henderson, ex PJH-1, pp. 113, 120, 149, 157, 164, 169, 175, 185, 193, 200, 206.
[11] Doyle, ex BJD-3, p. 70.
[12] Doyle, ex BJD-3, p. 72.
[13] Henderson, [50]-[51]; ex PJH-1, pp. 211-216.
[14] Harris, ex CTH-69, [9]-[13].
[15] Henderson, ex PJH-1, pp. 211-216.
[16] Henderson, ex PJH-1, p. 214 (bottom of page).
[17] Harris, [12]-[13], ex CTH-69.
[18] Harris, exs CTH-01 - CTH-68.
[19] Doyle, [3]-[4], exs BJD-1, BJD-2.
[20] Doyle, [5]-[9], exs BJD-4, BJD-5.
[21] Doyle, [11]-[12], exs BJD-7 - BJD-11.
[22] Doyle, [16], ex BJD-14.
[23] Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] 2 Qd R 171, [11]-[19]; Kellett Street Partners Pty Ltd v Pacific Rim Trading Co Pty Ltd [2013] QSC 298, [6]-[11]; All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289.
[24] (1998) 194 CLR 355.
[25] (2009) 239 CLR 27, 46-47 [47], citations omitted.
[26] Building Industry Fairness (Security of Payment) Regulation 2018 (Qld).
[27] (2005) 21 BCL 364; [2005] NSWCA 229, [45].
[28] KDV Sport, [17] and authorities cited there.
[29] cf s. 17(2) of the earlier Building and Construction Industry Payments Act 2004 that stipulated the requirements for the content of a statutory payment claim.
[30] T & M Buckley, [30]-[38], cited with approval in KDV Sport, [13].
[31] Iris Broadbeach (n 2).
[32] Iris Broadbeach, [137]-[141].
[33] Doyle, ex BJD-3.
[34] Doyle, [17]-[21], exs BJD-15 - BJD-18.
[35] Doyle, ex BJD-17.
[36] Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32; Alan Conolly and Co v Commercial Indemnity [2005] NSWSC 339, [23]; Modog Pty Ltd v ZS Constructions (Queenscliff) Pty Ltd [2019] NSWSC 1743, [78]-[79]; Rail Corporations of NSW v Nebax Constructions [2012] NSWSC 6; JR & LM Trackson Pty Ltd v NCP Contracting Pty Ltd [2019] QSC 201.
[37] Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32, [18].
[38] [2005] NSWSC 339, [14]-[23], especially [22].
[39] Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32, [19].
[40] Sought After Investments Pty Ltd v Unicus Homes Pty Ltd [2019] NSWSC 600, [26].
[41] Modog Pty Ltd v ZS Constructions (Queenscliff) Pty Ltd [2019] NSWSC 1743, [75]-[79].
[42] A unit holder in the TPG unit trust.
[43] Doyle, [11(b)], exs BJD-8 (paragraphs 34-39), BJD-9.
[44] Doyle, [11(b)], exs BJD-8 (paragraphs 40-41), BJD-9.
[45] Doyle, [11(b)], ex BJD-10 (paragraphs 4-8).
[46] Referring to Henderson declaration at [37], which was a reference to a payment returning equity to Kenik (as a unitholder in the TPG trust).
[47] See s. 82(4) of the BIF Act.
[48] Doyle, ex BJD-2, p. 3, part 3(c).
[49] See TPG’s primary submissions, [88] and authorities cited there.
[50] Acciona, [35(e)], [40].
[51] Acciona, [35(b)].
[52] cf Where a respondent has not provided a payment schedule: see Ceerose, [77]-[86].
[53] In truth, the adjudicator’s decision is made up of a multiplicity of decisions regarding individual issues and claims raised by the parties: Acciona, [85].
[54] [2023] NSWCA 215, [51] per Payne JA, Ward ACJ and Basten AJA agreeing.
[55] Acciona, [35], cited with approval in Niclin Constructions, [18].
[56] [2023] QSC 218, [23].
[57] [2023] NSWCA 215, [51].
[58] City of Ryde v AMFM Constructions Pty Ltd [2011] NSWSC 1469, [9] followed in Annie Street JV Pty Ltd v MCC Pty Ltd [2016] QSC 268 (Annie Street), [29].
[59] Acciona, [38].
[60] John Holland Pty Ltd v TAC Pacific Pty Ltd [2010] 1 Qd R 302, [66].
[61] Acciona at [35(e)], [40].
[62] Ceerose, [55]-[57].
[63] Ceerose, [66].
[64] Ceerose, [68].
[65] Ceerose, [69].
[66] Ceerose, [69].
[67] Decision, [422].
[68] Although the adjudicator’s consideration of the second element at [422] is somewhat oblique.
[69] Niclin Constructions, [26], citing City of Ryde v AMFM Constructions Pty Ltd [2011] NSWSC 1469.
[70] Acciona, [38]; Annie Street, [24].
[71] [2012] QSC 373. These findings were not the subject of appeal in Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2013] 2 Qd R 75.
[72] Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QSC 373, [56].
[73] Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QSC 373, [60].
[74] Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, 272 (in the context of reviewing a decision under the Migration Act which requires an error of law).
[75] Ceerose, [66].
[76] Doyle, [9] and [12].
[77] Decision, [408]-[416].
[78] Decision, [424] and Appendix A.
[79] Decision, [425].
[80] Decision, [405].
[81] Musico v Davenport [2003] NSWSC 977; John Holland Pty Ltd v TAC Pacific Pty Ltd [2010] 1 Qd R 302, 313 [32]; Spankie v James Trowse Constructions Pty Ltd (No 2) [2010] QSC 166, [10]; Walton Construction (Qld) Pty Ltd v Corrosion Control Technology Pty Ltd [2012] 2 Qd R 90, 101 [60]; and Northbuild Constructions Sunshine Coast Pty Ltd v Beyfield Pty Ltd [2014] QSC 80, [35].
[82] [2010] 1 Qd R 302, 321 [57]; cited with approval by McMurdo J (as he was then) in Caltex Refineries (Qld) Pty Ltd v Allstate Access (Australia) Pty Ltd [2014] QSC 223 (Caltex Refineries), [38]-[39].
[83] Trysams Pty Ltd v Club Instructions (NSW) Pty Ltd [2008] NSWSC 399, [45], cited with approval in Caltex Refineries, [40].
[84] John Holland Pty Ltd v TAC Pacific Pty Ltd [2010] 1 Qd R 302, [40]; referring with approval to Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 546, [23]-[30].
[85] (2018) 264 CLR 1.
[86] Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2012] 1 Qd R 525; [2011] QCA 22, [80], [127].
[87] Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2010] QSC 95, [47].
[88] Caltex Refineries, [39].
[89] By asking for further written submissions as empowered by s. 84(2)(b) of the BIF Act.
[90] Transgrid v Walter Construction Group [2004] NSWSC 21 at [68] per McDougall J.
[91] Ku-Ring-Gai Council v Ichor Constructions Pty Ltd [2014] NSWSC 1534 at [45] per Stevenson J.
[92] Acciona, [85], approved in Ceerose, [111].
[93] Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320, [43].
[94] BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2015] 1 Qd R 228; see also Watpac Construction (Qld) Pty Ltd v KLM Group Ltd [2013] QSC 236, [21]-[24].
[95] As their Honours then were.
[96] [2015] 1 Qd R 228, [29], [30].
[97] BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2012] QSC 346, [55]-[56] per Applegarth J.
[98] [2015] 1 Qd R 463, [29], [30].
[99] (2005) 63 NSWLR 385, 399 [52] per Hodgson JA.
[100] [2011] NSWSC 1039, [44] per McDougall J.
[101] [2012] QSC 346, [8] per Applegarth J, whose reasons on this point were not criticised on appeal: BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2015] 1 Qd R 228; see also Watpac Construction (Qld) Pty Ltd v KLM Group Ltd [2013] QSC 236, [21]-[24].
[102] Decision, [74]-[77]. Clause 36.1 provided that Kenik was not to vary the work under the Contract except as directed in writing.
[103] Decision, [106], [115].
[104] Decision, [85]-[116].
[105] Decision, [117]-[118].
[106] Decision, [147]-[148].
[107] Decision, [148].
[108] ‘Preliminaries’ is a term often used for indirect costs associated with carrying out works on a project, but which costs cannot be allocated to a specific element of the works, for example site overheads, utilities, site offices and site security.
[109] Decision, [234].
[110] See payment claim 31 invoice ‘Contract Works’ table appearing in Henderson, ex PJH-1, pp. 213-214.
[111] Henderson, ex PGH-1, pp. 120-148.
[112] Doyle, ex BJD-11.
[113] By asking for further written submissions as empowered by s. 84(2)(b).
[114] Doyle, ex BJD-2, p. 73.
[115] Section 126 of the BIF Act.