Chevron Park Pty Ltd v Groupline Constructions Pty Ltd & Ors

Chevron Park Pty Ltd (“Chevron”) sought judicial review of the decision of an adjudicator under the Building Industry Fairness (Security of Payment) Act 2017. The adjudicator’s decision required Chevron as principal to make a progress payment claim to a contractor. One of Chevron’s grounds of review was that the adjudicator fell into jurisdictional error as a result of failing to take into account payments made prior or subsequent to the date of the progress payment claim. Justice Treston rejected this ground of review. The adjudicator was required to adjudicate as between the amounts referred to in the progress payment claim and the payment schedule served in accordance with the procedural requirements of the Building Industry Fairness (Security of Payment) Act 2017. In the result, the application was dismissed.

Treston J

18 September 2024

Background

The applicant Chevron Park Pty Ltd (“Chevron”) sought a declaration that an adjudication decision be declared void in whole or in part. [1]–[2]. The adjudication decision required Chevron as principal to pay the first respondent, Groupline Constructions Pty Ltd (“Groupline”) to make a progress payment pursuant to a progress payment claim made in relation to the construction of a residential building known as the “Greenwich Project”. [2]–[3]. Chevron challenged the adjudication decision on a number of grounds: see [23]. One of the grounds was that the adjudicator failed to consider what were said to be relevant considerations being payments made by Chevron to Groupline before (“Past Payments”) and after (“Subsequent Payments”) the payment claim had been provided. [23].

Whether the adjudicator fell into jurisdictional error

Whether the adjudicator was required to consider Past and Subsequent Payments turned on the proper construction of s 88 Building Industry Fairness (Security of Payment) Act 2017. [51]. Chevron contended that s 88 sub-s (1) requires that an adjudicator consider not just the construction work to which a payment claim relates, but also whether any of the amounts claimed have been discharged, either by payments made or by operation of statute with the result that Past and Subsequent Payments should be deducted from the adjudicated amount. [54]. To support this submission Chevron placed emphasis on the phrase “to be paid” in sub-s (1) sub-p (a) which was said to require a reconciliation by the adjudicator of the amount claimed against amounts such as the Past and Subsequent Payments. [53].

Justice Treston rejected this submission for four reasons: see [56]–[61]. Her Honour observed that when s 88(1) is read in context with ss 68 and 69 Building Industry Fairness (Security of Payment) Act 2017, the word “amount” in s 88 (which is preceded by a definite rather than an indefinite article) must be construed as a reference the amounts in the payment claim served by the contractor pursuant to s 68 and the payment schedule served by Chevron pursuant to s 69. [56]–[57]. Justice Treston also observed that nothing on a fair reading of s 88 suggests that the adjudicator was required to take into account payments which post-dated the “reference date” as being the “date on which a claim for a progress payment may be made for construction work carried out …”. [59]–[60].

Chevron also argued that if its construction of s 88 was not preferred it would work absurd results. Whilst unclear precisely which ground this was said to support, her Honour addressed this argument in relation to what was said to be a failure to give adequate reasons. [27], [89]. It was said, if the adjudicator can ignore payments made after the adjudication application had been made but not yet decided, such a confined construction would lead to absurd results because the adjudication certificate would be issued for a “grossly incorrect amount”. This would lead to an “incorrect judgment sum and interest”. However, the difficulty with accepting this submission was s 93 Building Industry Fairness (Security of Payment) Act 2017. [89]. Justice Treston observed that this argument:

“… ignores s 93(2) of the [Building Industry Fairness (Security of Payment) Act 2017] which provides that the adjudication certificate must be accompanied by an affidavit stating that ‘the whole or a part of the adjudicated amount has not been paid’ at the time the certificate is filed. By s 93(3) judgment can only be obtained for the unpaid part of the adjudicated amount. While Chevron submits that is a ‘unilateral affair’, being an affidavit sworn only by the claimant, it is a procedure well known to this court, and there is nothing unusual about such an approach.” [89]. (footnotes omitted)

Disposition

In the result, the application was dismissed. [90].

D Kerr of Counsel