Icon Co (NSW) Pty Ltd v AMA Glass Facades Pty Ltd

1. [1]

   Two adjudicators appointed under the Building and Construction Industry Security of Payment Act 1999 (NSW) have, in three succeeding determinations under the one building contract, expressed different and inconsistent views as to the proper construction of the terms of the contract which govern the right of:

2. [2]

   The contract in question was made on 15 December 2015 and relates to the installation by AMA of a facade and associated works on the Opal Tower at Sydney Olympic Park. The contract includes a modified form of Subcontract Conditions AS4901-1998. All clause references that follow are from those conditions.

3. [3]

   The three determinations were by:

4. [4]

   In the First Durham Determination, Ms Durham determined that:

5. [5]

   In the Rivlin Determination, which raised indistinguishable issues, Mr Rivlin determined, contrary to Ms Durham’s findings in the First Durham Determination, that:

6. [6]

   AMA now contends that the Rivlin Determination was void. However, until these proceedings were commenced, AMA did not seek to challenge the Rivlin Determination by application to this Court for declaratory or prerogative relief. Nor did it seek to exercise its rights under s 26(2) of the Act to withdraw the adjudication application that led to the Rivlin Determination and to make a new adjudication application under s 17 of the Act.

7. [7]

   Rather, on 26 October 2018 AMA served on Icon a fresh payment claim which, it is agreed, is relevantly indistinguishable from that which led to the Rivlin Determination. That further payment claim led to the Second Durham Determination.

8. [8]

   In the Second Durham Determination, Ms Durham determined, contrary to the Rivlin Determination, that:

9. [9]

   Icon now seeks a declaration that the Second Durham Determination is void, or alternatively an order in the nature of certiorari quashing the Second Durham Determination on the basis that:

10. [10]

    By cross-summons, AMA seeks a declaration that the Rivlin Determination is void, or alternatively, leave pursuant to r 59.10(2) of the Uniform Civil Procedure Rules 2005 (NSW) to seek an order in the nature of certiorari quashing the Rivlin Determination, on the basis that an issue estoppel arose from the First Durham Determination which prevented Icon re-agitating before Mr Rivlin the contractual construction issues to which I have referred above at [1].

11. [11]

    It is common ground that:

12. [12]

    It is also common ground that:

13. [13]

    There may be an abuse of the processes of the Act where there is “repetitious re-agitation of payment claims”. [4] Allsop P was speaking of such a situation in Dualcorp Pty Ltd v Remo Constructions Pty Ltd [5] when his Honour said:

The situation before the Court

1. [14]

   There is thus this spectacle:

2. [15]

   This highly unsatisfactory situation has been caused by two things.

3. [16]

   The first is Mr Rivlin’s decision to express different opinions as to the construction of the contract to those expressed by Ms Durham.

4. [17]

   Irrespective of whether Ms Durham’s construction was correct or her opinions were “fundamental” to her determination in the sense of being the sole basis for her findings, it was not appropriate for an adjudicator to, in effect, dissent from earlier adjudicative expressions of opinion in relation to the same provisions of the same contract between the same parties in adjudications arising from the same project.

5. [18]

   It was also subversive of the intended operation of the Act, which is to establish a “coherent, expeditious and self-contained” scheme, [6] “designed to act quickly”, [7] and to achieve the result that “each party knows precisely where they stand at any point of time”. [8] That intended operation of the Act is illustrated by s 22(4) which provides that where an adjudicator determines the value of any construction work carried out under a construction contract or of any related goods and services to such work, subsequent adjudicators must adopt the same value, unless it can be shown the value has changed.

6. [19]

   AMA submitted that s 22(4) is “not an exhaustive statement of the matters determined by an earlier adjudication that are binding on a subsequent adjudicator” and that the Act “manifests an intention to preclude re-agitation of the same issues”. I agree.

7. [20]

   The second is AMA’s response to the Rivlin Determination. AMA did not, until now, seek to challenge the Rivlin Determination in the usual way. Rather, on 26 October 2018, within the three month time limit in UCPR r 59.10 for the commencement of proceedings for judicial review of the Rivlin Determination, AMA served on Icon a payment claim relevantly identical to that the subject of the Rivlin Determination. AMA then, in its adjudication application, put the same argument that it now seeks to put in these proceedings, namely that Icon was estopped from contending before Mr Rivlin that the conclusions expressed in the First Durham Determination as to the proper construction of the Contract were incorrect.

8. [21]

   This course was adopted in the face of judicial deprecation of the practice of the repetitious use of the adjudication process the subject of Allsop P’s observations that I have set out at [13].

What is to be done?

1. [22]

   It is common ground that if the Rivlin Determination is valid, the Second Durham Determination is invalid as it dealt with a payment claim relevantly identical to that dealt with in the Rivlin Determination.

2. [23]

   Notwithstanding my misgivings concerning Mr Rivlin’s decision not to adopt Ms Durham’s construction of the relevant provisions of the Contract, I doubt that the Rivlin Determination is thereby invalid.

3. [24]

   An issue estoppel will only arise if the issue in question is “fundamental” in the sense of being “legally indispensable to the conclusion” in question. [9] An issue estoppel does not cover “subsidiary or collateral matters of law or fact”. [10] If the issue in question was one of a number of alternative bases for the relevant decision it will not have the requisite “legal indispensability” such as to attract the doctrine of estoppel.

4. [25]

   I think there is substance in Icon’s submission that Ms Durham’s conclusions in the First Durham Determination as to the proper construction of the relevant provisions of the Contract were one of a number of bases upon which she concluded that AMA was entitled to variation and Icon was not entitled to liquidated damages.

5. [26]

   However, I need not form any final view about that question because there are a number of reasons why I consider I should not entertain AMA’s challenge to the Rivlin Determination.

6. [27]

   The first of those reasons is that AMA’s application to impeach the Rivlin Determination is made outside the three month time limit in UCPR r 59.10 which is, relevantly, in the following terms:

7. [28]

   The Rivlin Determination was made on 13 August 2018. The three month period referred to in UCPR r 59.10(1) expired on 13 November 2018. AMA filed its cross-summons on 22 February 2019. No witness on behalf of AMA has proffered an explanation for the delay.

8. [29]

   It is true that UCPR r 59.10, in terms, imposes a time limit only in relation to proceedings for judicial review. In its cross-summons AMA is, in addition to seeking judicial review of the Rivlin Determination seeking a declaration that the Rivlin Determination is void.

9. [30]

   However, the Court of Appeal has opined that the three month basis should been seen as applying also to declaratory relief. In Buttrose v Attorney General of New South Wales, [11] Beazley P and Leeming JA said:

10. [31]

    I am not persuaded that I should grant leave to AMA to apply for an extension of time to seek relief. AMA has been aware of the Rivlin Determination since it was made. Its decision inappropriately to challenge the Rivlin Determination by resubmitting the payment claim, rather than apply for declaratory or prerogative relief, has caused prejudice to Icon in that Icon has now had to resist AMA’s adjudication application to Ms Durham as well as bring these proceedings to quash the consequent determination.

11. [32]

    I would, in any event, withhold relief from AMA on discretionary grounds similar to those that commended themselves to Sackar J in State Water Corporation v Civil Team Engineering Pty Ltd, [12] in which case his Honour said:

12. [33]

    Like Sackar J, in the absence of any explanation for the delay, I would infer that AMA decided not to follow the usual procedure of seeking prerogative relief to quash the Rivlin Determination, and to instead serve the further payment claim, which was a repetition of the payment claim determined by Mr Rivlin, in the hope of securing a more favourable determination.

Conclusion

1. [34]

   For those reasons I propose to make an order in the nature of certiorari quashing the Second Durham Determination and to dismiss the cross-summons.

2. [35]

   I invite the parties to bring in short minutes to give effect to these reasons.