Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190
Under the New South Wales Building and Construction Industry Security of Payment Act 1999, where no payment schedule was provided and the claim was not paid in full, notice within the time fixed by section 17(2)(a) is an essential condition of a valid adjudication application, and the Supreme Court may quash a determination where the notice was late.
What the court decided
Hamo Industries Pty Ltd agreed to carry out fitout work for Chase Oyster Bar Pty Ltd [114]. Chase provided no payment schedule for Hamo's payment claim [115]. The claimed amount fell due on 13 January 2010 and was not paid [116], [117]. Hamo gave notice of its intention to apply for adjudication on 11 February 2010, which McDougall J found was outside the 20 business days allowed [117], [240]. The adjudicator found the notice was in time and determined that Hamo was entitled to the claimed amount and interest [119], [120].
By order of 23 April 2010, three questions in Chase's proceedings were removed into the Court of Appeal [124]. They concerned whether the determination should be quashed, the standing of Brodyn Pty Ltd v Davenport after the High Court's decision in Kirk v Industrial Court of New South Wales and the constitutional validity of any limit on review [124]. The three judges gave separate reasons and all agreed on the answers Basten JA proposed [61], [108], [267], [287].
The Court answered that the Supreme Court has power to find that an application did not comply with section 17(2)(a), that a determination made without a valid application was invalid and that there was non-compliance here, and power to quash the determination by an order in the nature of certiorari [108]. To the extent that Brodyn held, for a non-compliant application, that the Court need not determine jurisdictional error, that certiorari was unavailable and that the Act limited such review, it was in error, and the Act contained no such limitation [108].
Each judge treated the time limit as essential [50], [55], [96], [222]. Spigelman CJ relied on the mandatory words "cannot be made unless" [41]. He also relied on the carefully calibrated sequence of time limits [47], [50]. Basten JA adopted the other judges' reasons on this point and called the language intractable [96]. For McDougall J, giving notice in time is a jurisdictional fact [222].
Basten JA held, and McDougall J agreed, that the Act does not allow the adjudicator to decide whether the application is valid, so the challenge turned on facts found by the Court [101], [238]. The Chief Justice said the provision is not addressed to the adjudicator [36], [183]. Basten JA held the adjudicator's error was jurisdictional on either view of it [103].
Spigelman CJ described adjudication as a statutory dispute resolution process subject to the supervisory jurisdiction [5]. Basten JA rested amenability on the adjudicator's statutory function and found no sufficient basis in the Act for excluding certiorari for jurisdictional error [66], [70], [90]. McDougall J held that adjudicators are amenable to certiorari because the Act gives them authority to decide legal rights [257], [261]. Spigelman CJ and McDougall J rejected any separate duty to act judicially, and Basten JA agreed with the Chief Justice's analysis while doubting the point needed deciding [10], [84], [260].
The Chief Justice reasoned that Kirk gave the jurisdictional distinction a constitutional dimension that undermined Brodyn, on one reading of Brodyn's reasoning [29], [32]. Basten JA thought each proposition in the second question wrong, but said his conclusions did not follow from any reconsideration of the law that Kirk required [106]. McDougall J agreed with Basten JA's reasons on the second and third questions and, with one reservation, with the Chief Justice's [287].
Basten JA said that a court answering questions should not make consequential orders [109]. Whether Chase was entitled to final relief remained to be decided [288]. McDougall J recorded that the other judges favoured remittal to the Equity Division, so he did not consider relief [267]. As between Chase and Hamo, the costs in the Court of Appeal were to be Chase's costs in the proceedings [61], [109], [288].
Why it matters
Where there is neither a payment schedule nor full payment, a claimant that misses the 20 business day notice period has no valid adjudication application, and the adjudicator's contrary view does not bind the court. Claimants should count that period from the due date with care.
The answer on Brodyn was unanimous, but the reasons were not. The decision is not uniform authority on how far Kirk required Brodyn to be revisited, since Basten JA did not derive his answers from Kirk.
Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.