Saville v Hallmarc Construction Pty Ltd [2015] VSCA 318

What the court decided

The appeal arose from judicial review of an adjudication determination made under the Building and Construction Industry Security of Payment Act 2002 (Vic) [1]. Gregory Saville contracted with Hallmarc Construction Pty Ltd to provide joinery for 134 apartments being built at Highett [2]. The adjudicator and the trial judge found that the contract was a signed letter of acceptance dated 7 February 2013 and its attachments, under which Saville was to supply joinery and to supply and install robes [13].

On 21 February 2014 Saville served a payment claim, and Hallmarc "failed to provide a payment schedule" [2]. The adjudicator treated the claim as a progress claim, so that section 9(2)(b) applied, and determined that the reference date was after 25 November 2013 [30]. He relied on a JMP Carpentry invoice of that date for wardrobe repairs, treating them as uncontested contract work [30].

On Hallmarc's application for review, Vickery J received evidence not before the adjudicator [2], [36]. He held that the payment claim was a final payment claim [42]. He found that the contract provided for no final certificate or defects liability period, so the Act's default provisions applied [40], [41]. He therefore applied section 9(2)(d)(iii), under which the reference date is the day after construction work was last carried out, or related goods and services were last supplied, under the contract [44], [46]. He found that Hallmarc had engaged JMP Carpentry on its own behalf, not as Saville's agent [40]. He found that Saville last performed work or provided related goods or services under the contract on 30 September 2013 [45]. The reference date was therefore 1 October 2013, and the payment claim, served on 21 February 2014, was outside the three months allowed by section 14(5)(b) [46]. He declared the adjudication determination void and quashed it [35].

In joint reasons, Warren CJ and Tate JA concluded that the appeal should be dismissed and Saville's application to adduce further evidence refused [145], [146]. Kaye JA agreed, for their reasons, that the appeal should fail [147]. The grounds of appeal did not challenge the characterisation of the payment claim as a final payment claim, so section 9(2)(d) was the critical provision [50].

Saville argued, relying on Basten JA in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd, that an adjudicator's determination was reviewable only if it involved a straightforward calculation of time or was arbitrary, capricious or irrational [63], [79]. The Court held that Saville had misconstrued those remarks [76].

The Court held that jurisdictional facts are not confined to matters that can be ascertained mechanically or by straightforward calculation and, depending on the statute conferring jurisdiction, may require evaluation and assessment [93]. The Court reasoned that the adjudicator's jurisdiction under section 23 depended on the validity of the payment claim, which was invalid if served out of time, so the claim's validity, as an essential requirement of the adjudicator's determination, was a jurisdictional fact and reviewable [94]. Although the reference date here turned on evaluating the contract's scope and when work was done within it, that need for evaluation did not stop it being a jurisdictional fact [97]. The Court distinguished Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd, because fixing a reference date under section 9(2)(d) does not depend on an adjudicator's specialist evaluation, and held that it is reviewable [99].

On the scope of works, the Court said that the adjudicator was mistaken in thinking there was no contest, and distinguished whether the repaired wardrobes were within Saville's scope of works from whether the repairs were carried out on his behalf [103]. Unlike the adjudicator, the judge knew the point was contested, and he could consider the evidence before him [107]. The Court held that the judge did not err in concluding that the scope of works did not extend to review or repair of joinery work by contractors Hallmarc engaged [108]. It followed that there was no error in the judge's fixing of the reference date under section 9(2)(d) as 1 October 2013, that the payment claim was out of time and that the adjudicator erroneously assumed jurisdiction [114].

On the source of the contract, the Court held that the earlier letter and emails on which Saville relied were pre-contractual negotiations [122]. It said they were "superseded by, and merged in, the construction contract" [123]. The same applied to an email exchange of 21 February 2013 [123]. The judge had construed the contract on its plain and unambiguous terms, and the Court held that he was right to do so [123]. Because Saville chose not to cross-examine Hallmarc's witnesses on their affidavits, the judge was entitled to prefer their evidence, which "was not otherwise implausible or logically untenable" [124]. It held that the judge's reasons were adequate in the particular circumstances [125].

Saville sought to adduce an affidavit, not before the judge, that Hallmarc's contract administrator had sworn for a second adjudication [13], [127]. The Court held that the test in Clark v Stingel was not met, because Saville had the evidence before trial and it was not reasonably clear that it would have produced an opposite result [139].

Why it matters

The Court held that the fixing of a reference date under section 9(2)(d) of the Victorian Act is reviewable as a jurisdictional fact. The evaluation needed here, of the scope of the contract and the timing of work, did not call for an adjudicator's specialist expertise, so it did not prevent that date being a jurisdictional fact. A reviewing court may decide that date on the evidence before it, not only the material the adjudicator relied on.

The Court also rejected the view that review of the conditions of an adjudicator's jurisdiction is confined to straightforward calculations of time or to determinations that are arbitrary, capricious or irrational.

The Court upheld the trial judge's finding that, under this contract, repairs by a contractor Hallmarc engaged on its own behalf were not carried out on Saville's behalf, so they could not postpone the reference date.

The decision applied the Act in the form the Court set out, so readers should check the current text of the Act before relying on the decision.

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.