Insecurity of payment

(In)Security of payments
Cameron Ford*
For the first time since their enactment in 2004, an
appellate court has spoken on the construction security of
payment legislation of Western Australia and the Northern
Territory. In AJ Lucas Operations Pty Ltd v Mac-Attack
Equipment Hire Pty Ltd (2009) 25 NTLR 14, the Northern
Territory Court of Appeal has expanded the scope for
attacks on adjudicators’ determinations and has arguably
made a far-reaching ruling rendering of no effect provi-
sions in contracts allowing claims to include amounts
outstanding from earlier claims.
COURT OF APPEAL NARROWS APPLICATION OF SECURITY OF
PAYMENTS ACT
Five years after the enactment of the Construction Contracts (Security of
Payments) Act 2004 (NT) (the NT Act),1
the Northern Territory (NT) Court of
Appeal2
has had an opportunity to consider its operation in AJ Lucas Operations
Pty Ltd v Mac-Attack Equipment Hire Pty Ltd (2009) 25 NTLR 14 (Mac-Attack).
Several first instance decisions of judges,3
a magistrate4
and the Western
Australian (WA) State Administrative Tribunal (SAT)5
have dealt with the Act
and its WA counterpart6
but this is the first occasion those statutes have been
considered by an appellate court.
*
Registered Adjudicator; Special Counsel, Downer EDi Ltd, Singapore;
cameron@cameronford.com.au
1
The Construction Contracts (Security of Payments) Act 2004 (NT) (the NT Act), also referred to as
“the Act” and together with the Construction Contracts Act 2004 (WA) referred to as “the western
legislation”, “the western Acts” or “the western statutes”.
2
Mildren, Riley and Southwood JJ, with Mildren J and Southwood J writing separate judgments
agreeing in the result, and with Riley J agreeing with Southwood J generally and with Mildren J on
one point.
3
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd (2008) 36 WAR 379; O’Donnell Griffın Pty Ltd v
John Holland Pty Ltd [2009] WASC 19; Boutique Venues Pty Ltd v JACG Pty Ltd [2007] NTSC 5;
Alcan Gove Development Pty Ltd v Thiess Pty Ltd [2008] NTSC 12; Independent Fire Sprinklers (NT)
Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15; TransAustralian Construction Pty v Nilsen (SA) Pty
Ltd (2008) 23 NTLR 123.
4
GRD Building Pty Ltd v Gallaugher and Total Development Supplies Pty Ltd (unreported, NT Mag
Ct, Cavanagh SM, 10 March 2008).
5
Marine & Civil Bauer Joint Venture v Leighton Kumagai Joint Venture [2005] WASAT 269; Merym
Pty Ltd v Methodist Ladies College [2008] WASAT 164; Silent Vector Pty Ltd v Squarcini [2008]
WASAT 39; Diploma Construction Pty Ltd v Esslemont Nominees Pty Ltd [2006] WASAT 350; Match
Projects Pty Ltd v Arccon (WA) Pty Ltd [2009] WASAT 62; Moroney v Murray River North Pty Ltd
[2008] WASAT 111; Match Projects Pty Ltd & Arccon (WA) Pty Ltd [2009] WASAT 134; Blackadder
Scaffolding Services (Aust) Pty Ltd & Mirvac Homes (WA) Pty Ltd [2009] WASAT 133.
6
Construction Contracts Act 2004 (WA) (the WA Act) (together with the NT Act referred to as “the
western legislation”, “the western Acts” or “the western statutes”).
(2010) 1 NTLJ 165 165

Summary
The Court of Appeal in Mac-Attack held that there was implied in the NT Act a
prohibition against making more than one payment claim for the performance of
each contractual obligation. It was prohibited, the court said, from including in a
later payment claim an amount claimed earlier and still unpaid, even where the
contract expressly permitted that inclusion.
Because of this implied provision in the NT Act, an adjudicator’s ruling that
a previously claimed amount could be included in a later claim and be the subject
of an adjudication application was a misinterpretation of the Act going to his or
her jurisdiction resulting in invalidity of the determination. The majority7
went
further to hold that, for an adjudicator’s determination to be valid, his or her state
of satisfaction as to certain criteria (including the time for making applications)
must be both reasonable and founded on a correct understanding of the law. Since
the time for making the application in this case depended on whether unpaid
amounts could be included in later payment claims, a ruling that that was possible
involved a misinterpretation of the law as to the existence of that criterion.
In coming to those conclusions, their Honours’ held that:
1. the Supreme Court may review an adjudicator’s determination notwithstand-
ing the privative clause in s 48;
2. an error in interpreting the Act will invalidate a determination if it goes to
jurisdiction;
3. an error as to the existence of a jurisdictional fact will invalidate a
determination if it is unreasonable or involves a misinterpretation of the Act;
4. it is the adjudicator’s state of satisfaction as to the existence of the criteria in
s 33(1)(a) that is the jurisdictional precondition, rather than the objective
existence of those matters;
5. the Supreme Court may entertain reviews of determinations on whether the
criteria in s 33(1)(a) have been established;
6. there was implied in the Act a prohibition on making valid payment claims
for amounts unpaid from previous payment claims, and from bringing
applications for adjudication based on those subsequent payment claims;
7. provisions in construction contracts permitting payment claims for amounts
unpaid from previous payment claims are of no effect;
8. the existence and validity of a payment claim goes to the jurisdiction of an
adjudicator.
Addressing those rulings in order, this article respectfully suggests:
1. it is clear the privative clause does not prevent the Supreme Court from
reviewing a determination;
2. authority supports the contention that a misinterpretation of the Act will
invalidate a determination if it goes to jurisdiction;
7
Southwood J, with Riley J agreeing and Mildren J expressing no opinion.
Ford
(2010) 1 NTLJ 165166

3. although jurisdictional error has been rejected as a basis for review in New
South Wales (NSW),8
it seems that an error as to the existence of a
jurisdictional fact will invalidate a determination if it is unreasonable or
involves a misinterpretation of the Act;
4. on a review in the Local Court of the criteria in s 33(1)(a), the adjudicator’s
satisfaction is only the precondition to the matters in subpara (iv). In relation
to the preceding subparagraphs, it is the objective existence of those matters
which is relevant, not the adjudicator’s satisfaction as to their existence;
5. another view is that, because there is the statutory right of review in the
Local Court of the existence of the criteria in s 33(1)(a), a legislative intent is
apparent to restrict review of those matters in the Supreme Court;9
6. there was no necessity or warrant to imply such a prohibition into the Act
against payment claims for amounts unpaid from previous payment claims;
7. since there was no necessity to imply the prohibition, such provisions in
contracts have effect;
8. in the absence of the implied prohibition, it is contrary to weighty and
indistinguishable authority to hold that payment claims go to jurisdiction or
to the basic and essential requirements of the Act.
The Court of Appeal unanimously held in Mac-Attack that the adjudicator
committed jurisdictional error in determining that the applicant was permitted
under the contract to deliver more than one payment claim for the same work,
and, inferentially, that the Act permitted an application within time founded on
the later payment claim. Because these ﬁndings involved a misinterpretation of
the Act, they lead to errors going to jurisdiction and were not merely errors
within jurisdiction. Identifying errors as jurisdictional or non-jurisdictional is
therefore crucial.
These issues will be considered under the following headings:
1. Outline of the Act;
2. The facts of Mac-Attack;
3. The trial decision;
4. The appeal decision and the points listed above;
5. Conclusion.
OUTLINE OF THE NT ACT
Modelled on the Construction Contracts Act 2004 (WA) (the WA Act),10
the NT
Act sets up a scheme for rapid determination of payment claims under
construction contracts,11
which are widely deﬁned.12
A party may apply for
8
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [54]-[55]; Coordinated Construction Co Pty
Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385; Perform (NSW) Pty Ltd v MEV-AUS
Pty Ltd [2009] NSWCA 157 at [61]. See also Grocon Constructors Pty Ltd v Planit Cocciardi Joint
Venture (No 2) [2009] VSC 426 at [87]-[88].
9
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19.
10
See Northern Territory, Legislative Assembly, Parliamentary Record No 22 (14 October 2004)
(Second Reading Speech of the Minister of Justice and Attorney-General, Dr Peter Toyne, on the
Construction Contracts (Security of Payments) Bill 2004 (NT)).
11
Boutique Venues Pty Ltd v JACG Pty Ltd [2007] NTSC 5 at [16] (Southwood J); Alcan Gove
Development Pty Ltd v Thiess Pty Ltd [2008] NTSC 12 at [19] (Angel J).
(2010) 1 NTLJ 165 167

adjudication of a disputed payment claim.13
A payment claim is any claim for
payment under the contract14
and need not be in a particular form unless the
contract makes no provision as to how a claim for payment is to be made.15
A payment dispute arises when the amount claimed is due to be paid under
the contract but has not been paid in full, has been rejected or wholly or partly
disputed.16
It is therefore the contract and not the NT Act that determines when a
claim is due and when a payment dispute can arise. Even where the contract
contains no terms about the contractor’s entitlement to be paid,17
the entitlement
to progress payments,18
how payment claims are to be made,19
responded to and
paid,20
the contract still determines those matters because the NT Act fills the
gaps by implying terms into the contract rather than by simply legislating what
those terms will be.21
Applications must be made within 90 days after a payment dispute arises.22
Any application made after that time must be dismissed by the adjudicator
without determining its merits.23
An application must also be dismissed
summarily if the contract is not a construction contract,24
if an application has not
been prepared and served in accordance with all of the requirements of s 28,25
or
if the dispute is ruled upon by a court, arbitrator or other body.26
The way in which payment disputes arise under the NT Act27
is significantly
different from that in the security of payment legislation of the eastern States28
12
NT Act, s 5; WA Act, s 4.
13
NT Act, s 27.
14
NT Act, s 4.
15
NT Act, s 19. If there is no such provision, the payment claim must be in the form of the Sch,
Div 4, which is implied into the contract.
16
NT Act, s 8.
17
NT Act, s 17.
18
NT Act, s 18.
19
NT Act, s 19.
20
NT Act, s 20.
21
Not directly relevant here, other terms are implied into a contract which is silent on variations (s 16),
interest (s 21), ownership of goods (s 22), duties as to unfixed goods on insolvency (s 23) and retention
money (s 24).
22
NT Act, s 28.
23
NT Act, s 33(1)(a)(ii).
24
NT Act, s 33(1)(a)(i).
25
NT Act, s 33(1)(a)(ii).
26
NT Act, abbreviating s 33(1)(a)(iii).
27
And its WA equivalent on which it was modelled.
28
Building and Construction Industry Security of Payment Act 1999 (NSW) (the NSW Act), Building
and Construction Industry Security of Payment Act 2002 (Vic) (the Vic Act), Building and
Construction Industry Payments Act 2004 (Qld) (the Qld Act), Building and Construction Industry
Security of Payment Act 2009 (SA), Building and Construction Industry Security of Payment Act 2009
Ford
(2010) 1 NTLJ 165168

and Singapore.29
Under that legislation, an adjudicable payment dispute only
arises after the claimant’s delivery of a payment claim under the Act containing
the prescribed information30
or in the prescribed form,31
and the respondent’s
failure after the legislated time to respond with a payment schedule (also
containing the prescribed information32
or in the prescribed form)33
accounting
for all of the amounts claimed. A payment claim under the eastern legislation may
only be served after an amount becomes due under the contract, that is, after
following the contractual procedure for making a claim (eg invoice, progress
claim etc), where there is a contractual procedure.34
In other words, an adjudicable payment dispute does not arise under the
eastern legislation immediately an amount is due but unpaid under the contract.35
There are the further requirements of a statutory payment claim being delivered
after an amount is due and unpaid, and of no fully responsive statutory payment
schedule being delivered. While an amount being due but unpaid under the
contract is a precondition, it is not the only one. In the NT and WA, a payment
dispute for the purposes of the Act can occur without the parties intending and
without their realising that time has started to run for making an application. It
can simply occur when an amount is due and unpaid under the contract following
an ordinary invoice.
This difference assumes importance when considering the reasoning in
Mac-Attack.
THE FACTS OF MAC-ATTACK
A payment claim and dispute
An owner of hire equipment rendered invoices to a hirer which, under the
contract, were to be paid within 30 days after the end of the month in which they
were rendered. They were not paid and later the owner delivered a document
headed “Tax Invoice No 1461” which was a summary or accounting of the total
amount outstanding under all previously rendered tax invoices. That later invoice
demanded payment within seven days.
Eleven appendices were attached to Tax Invoice No 1461, each containing a
schedule of payment claims for a particular piece of equipment, or a charge for a
particular period of time, with copies of the supporting invoices including the
unpaid invoices.
(Tas) and Building and Construction Industry (Security of Payment) Act 2009 (ACT) (together with
the Singapore legislation referred to as “the eastern legislation”, “the eastern Acts” or “the eastern
statutes”).
29
Building and Construction Industry Security of Payment Act 2004 (Sing) (the Singapore Act)
(together with the legislation of the eastern States referred to as “the eastern legislation”, “the eastern
Acts” or “the eastern statutes”).
30
NSW Act, s 13; Vic Act, s 14; Qld Act, s 17; Singapore Act, s 10.
31
Vic Act, s 14; Singapore Act, s 10.
32
NSW Act, s 14; Vic Act, s 15; Qld Act, s 18; Singapore Act, s 11.
33
Vic Act, s 15; Singapore Act, s 11.
34
NSW Act, s 11(1); Vic Act, s 12(1); Qld Act, s 15(1); Singapore Act, s 8(1) and (2).
35
Where the contract states when payment is due: NSW Act, s 11(1); Vic Act, s 12(1); Qld Act,
s 15(1); Singapore Act, s 8(1) and (2).
(2010) 1 NTLJ 165 169

An application for adjudication
The hirer responded to Tax Invoice No 1461 with a payment schedule36
disputing
the amounts claimed, following which the owner applied for adjudication of the
dispute under the Act. That application included a document headed “Tax Invoice
No 1461” but it was different from its eponymous predecessor and had not been
seen previously by the hirer.
The adjudicator’s determination
The hirer resisted the application on two bases – that the application was
defective and should have been dismissed summarily because the first Tax
Invoice No 1461 was not attached to the application as required by s 28(2)(b)(ii),
and that that invoice and the one attached to the application claimed amounts
previously invoiced and which were out of time for an application.
Dismissing the first point, the adjudicator determined that attaching a similar
but not identical invoice to the application with the appendices was sufficient
compliance with the requirement in s 28(2)(b)(ii) that the application “state or
have attached to it any payment claim that has given rise to the payment
dispute”.37
As to the argument that the invoices claimed amounts previously invoiced
and outside the 90-day application period, the adjudicator held that, since the
contract did not expressly exclude the delivery of further invoices for amounts
previously claimed, the owner was contractually entitled to deliver invoices for
previously claimed amounts. In so holding, he purported to follow a decision of a
magistrate which he believed to be authority for that point.
Granting the application, the adjudicator found that the first Tax Invoice
No 1461 was a payment claim within the meaning of the Act and that it was
sufficient to ground an adjudicable payment dispute. He did so on the basis that,
even though it only claimed amounts previously claimed and unpaid, the contract
did not expressly exclude the delivery of further invoices for amounts previously
claimed.
Because the contract did not expressly preclude the redelivery of unpaid
invoices, the delivery of the first Tax Invoice No 1461 created a fresh payment
claim, and failure to pay created a fresh payment dispute on which an application
for adjudication could be grounded. In this way, the owner was able to enliven
claims for adjudication where the time for making an application had passed.
So ruling, the adjudicator felt obliged to follow a decision of a magistrate38
on an earlier determination of the same adjudicator in which he understood the
court to hold that, because there was no limitation in the contract in that case on
36
A payment schedule is not required by the NT Act and has no special statutory significance other
than evidencing a dispute for the purposes of s 8.
37
See AJ Lucas Operations Pty Ltd v Mac-Attack Equipment Hire Pty Ltd (2009) 25 NTLR 1 at [13]
(trial decision).
38
GRD Building Pty Ltd v Gallaugher and Total Development Supplies Pty Ltd (unreported, NT Mag
Ct, Cavanagh SM, 10 March 2008).
Ford
(2010) 1 NTLJ 165170

the number of times the claimant could lodge the same claim, each claim had to
be considered separately on its merits. Kelly J disagreed that the magistrate had
made such a ruling.39
The significance of this ruling is that the NT Act requires an application for
adjudication to be made within 90 days of a payment dispute arising.40
A
payment dispute arises when an amount claimed remains unpaid in full when due
to be paid under the contract, or is wholly or partially disputed.41
In this case,
payment disputes for the earlier invoices arose on their non-payment 30 days
after the end of the month in which they were rendered. The time for making an
application commenced to run from that date. Any application more than 90 days
later would be out of time and bound to be rejected by the adjudicator.42
If the contract precluded, or did not permit, delivery of invoices for
previously claimed amounts, the owner did not have a contractual right to deliver
Tax Invoice No 1461 to refresh the claims and trigger a new payment dispute on
which to found an application.
THE TRIAL DECISION
Kelly J ultimately held43
that, even though the adjudicator had made an error of
law in finding that the application was made within time,44
his determination was
not a nullity. This was because an error of law on a non-essential requirement of
the Act did not invalidate a determination. It was with this conclusion the Court
of Appeal disagreed, holding that “the adjudicator cannot assume jurisdiction by
an error of law going to his jurisdiction”45
and “[a] reasonable and legally correct
state of satisfaction [as to the existence of the criteria in s 33(1)(a)(i) to (iv)] is a
necessary jurisdictional fact”.46
Her Honour said47
that the question whether a particular application
complied with s 28(2(b)48
was a question of fact to be determined by the
adjudicator and with which the court could not interfere. Her Honour said49
that
the adjudicator properly had regard to the first Tax Invoice No 1461 to determine
whether or not the application complied with the NT Act in stating the details of
the payment claim. While he may have been wrong in his conclusion that it did in
39
Trial decision (2009) 25 NTLR 1 at [14].
40
NT Act, s 28(1).
41
NT Act, s 8.
42
NT Act, s 33(1).
43
Trial decision (2009) 25 NTLR 1 at [34]-[35].
44
Because he found that the contract did not preclude successive invoices for amounts previously
claimed.
45
AJ Lucas Operations Pty Ltd v Mac-Attack Equipment Hire Pty Ltd (2009) 25 NTLR 14 at [13]
(Mildren J) (Mac-Attack).
46
Mac-Attack (2009) 25 NTLR 14 at [33] (Southwood J); Riley J agreeing at [16].
47
48
That is, attaching or stating the details of the claim.
49
(2010) 1 NTLJ 165 171

fact comply, that was a matter for him and, having asked himself the right
question, his conclusion was not reviewable.50
Her Honour said51
that the magistrate’s decision relied upon by the
adjudicator was not authority for the proposition that unless a contract
specifically prohibits the resubmitting of claims, a party can re-start the 90-day
period for making an application for an adjudication under the NT Act simply by
serving another invoice.52
If it did so hold, she said, it would plainly be wrong.
The question the adjudicator should have asked, her Honour said,53
was
when did the payment dispute arise, which in turn depended on when the
amounts claimed became due under the contract.54
Since it was common ground
most claims were outside the 90-day application period, the adjudicator was
wrong to hold that the claims were in time.55
But that did not mean the determination was void. That would occur where
“there has not been compliance by the adjudicator with the essential requirements
for the existence of a determination, or there has not been a bona fide attempt by
the adjudicator to exercise the relevant power, or if there has been substantial
denial of natural justice”.56
In so ruling, her Honour was following Southwood J
and Mildren J in TransAustralian Construction Pty Ltd v Nilsen (SA) Pty Ltd
(2008) 23 NTLR 123 (TransAustralian Construction) and Independent Fire
Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 (Independent
Fire Sprinklers) respectively who had applied this aspect of the NSW Court of
Appeal decision in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 (Brodyn).
In holding the application not to be a nullity for the adjudicator finding that
the application stated the details of the claim, her Honour said:57
I do not agree that actual compliance with the requirements of section 28(2)(b)(ii)
was intended by the legislature to be a pre-requisite to the existence of a
determination. Unlike the existence of a construction contract to which the Act
applies, the existence of a written application for adjudication, and service of that
application on the other party, (this list is not intended to be definitive – there may be
other essential requirements), it seems to me that the question of whether the
application sets out the details of the payment claim giving rise to the payment
dispute so as to comply with section 28(2)(b)(ii) – or for that matter the question of
whether it sets out the details of relevant extracts of the construction contract so as to
50
51
52
The decision, transcript of ex tempore reasons, does not deal with the issue at all. It considers only
whether, as a matter of fact, a document was a payment claim under the contract and concludes that it
was not because it was ambiguous, confusing, and did not alert the paying party to its responsibilities
under the Act. It may be that this document included amounts previously claimed, but since the
document was held not to be a payment claim under the Act, the decision could not be authority for the
proposition contended. This author is indebted to Mr Wade Roper, counsel for Mac-Attack, who
provided him with a copy of the decision.
53
54
55
56
57
Ford
(2010) 1 NTLJ 165172

comply with section 28(2)(b)(i) – is a matter of detail which the adjudicator is
required to decide and which he may decide wrongly without rendering his decision a
nullity.
As to whether the application was made within time, Kelly J said:58
It is clear, for the reasons set out above, that the adjudicator in the present case did
make an error of law in the process of determining that the application was made
within 90 days of the payment dispute arising. However, I see no reason to
distinguish between factual errors and errors of law made by the adjudicator in
determining whether the Application was made within 90 days after the payment
dispute arose. As Mildren J said in Independent Fire Sprinklers (NT) Pty Ltd v
Sunbuild Pty Ltd … at [48]:
If the adjudicator has jurisdiction to determine whether or not the 90 day time
limit has been complied with, his decision cannot be void. In Brodyn,
Hodgson JA speciﬁcally held that that the legislature did not intend that exact
compliance with that provision was essential to the existence of a determination.
I consider that the structure and purposes of the Act do not support a conclusion
that an adjudication is void if the adjudicator wrongly concludes that the time
limits have been complied with …
The question of whether the Application was served within 90 days of the payment
dispute(s) arising is one which the adjudicator was required to decide and the fact that
he made an error of law in the process of making that determination does not render
his decision a nullity. There is no right of appeal to this Court from the decision of an
adjudicator based on error of law.
THE APPEAL
As has been said, the Court of Appeal held that the adjudicator’s error of law was
one going to jurisdiction and therefore rendered the determination a nullity. This
was the principal, but not the only, divergence from the trial judge’s reasoning.
The other point of difference was in the Court of Appeal’s ruling that the NT Act
contained an implied prohibition against more than one application for each
amount claimed.59
This leads to the rulings made by the Court of Appeal.
Supreme Court may declare determination void for
jurisdictional error
Mildren J,60
with the other members agreeing,61
said that the privative clause in
s 48(3) purporting to limit review of determinations cannot prevent the court
from reviewing determinations for jurisdictional error where the adjudicator
misconstrues the NT Act. This ruling is unexceptional, applying the High Court’s
approach to privative clauses in Plaintiff S157/2002 v Commonwealth (2003) 211
58
Trial decision (2009) 25 NTLR 1 at [34]-[35].
59
Mac-Attack (2009) 25 NTLR 14 at [11] (Mildren J), [39] (Southwood J); Riley J agreeing at [16].
60
Mac-Attack (2009) 25 NTLR 14 at [13].
61
Mac-Attack (2009) 25 NTLR 14 at [16] (Riley J), [51] (Southwood J).
(2010) 1 NTLJ 165 173

CLR 476 (Plaintiff S157/2002), following the approach of other jurisdictions62
and single judges in the NT63
to judicial review of security of payment
determinations.
Section 48 of the NT Act says:
Review of adjudicator’s decision to dismiss application
(1) A person who is aggrieved by a decision made under section 33(1)(a) may apply
to the Local Court for a review of the decision.
(2) If, on the review, the decision is set aside and referred back to the adjudicator,
the adjudicator must make a determination under section 33(1)(b) within
10 working days after the date on which the decision is set aside or any
extension of that time agreed on by the parties.
(3) Except as provided by subsection (1), a decision or determination of an
adjudicator on an adjudication cannot be appealed or reviewed.
In Mac-Attack, Mildren J said:64
Section 48(3) of the Act contains a privative clause. Except as provided by s 48(1)
(which applies only where the adjudicator dismisses the application under s 33(1)(a)),
a decision of an adjudicator cannot be appealed or reviewed. However, given the
nature of the tribunal which the Act provides for, this provision does not prevent the
Court from declaring that a determination is void for jurisdictional error of a kind
where the tribunal wrongly construes the Act. I do not think there is any doubt that
the adjudicator cannot assume jurisdiction by an error of law going to his jurisdiction.
In Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd, I held that the
decision of an adjudicator who wrongly determined whether the 90 day time limit had
been complied with, was not void. The Judge below felt constrained to follow what I
then said. But that was a case of non-jurisdictional error. In my opinion, an
adjudicator cannot wrongly construe the Act on a question going to his jurisdiction to
decide the adjudication on the merits. As Marshall CJ said in Marbury v Madison in
a passage quoted with approval by Brennan J in Attorney-General (NSW) v Quin:
It is, emphatically the province and duty of the judicial department to say what
the law is.
… Whether any other kind of jurisdictional error would vitiate the decision of an
adjudicator is a matter which does not have to be decided in this appeal.
His Honour’s reference to Plaintiff S157/2002 was to the statement of
62
For example, Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [42], [47]-[55] (Hodgson JA),
with Mason P and Giles JA agreeing. (It must be noted that the Court of Appeal took the view in
Brodyn that, although under the NT Act there was not an explicit exclusion of the jurisdiction of the
court prior to the obtaining of judgment, an intention was disclosed to exclude curial intervention for
errors of law in the adjudicator’s determination.) Walton Construction (Qld) Pty Ltd v Salce [2008]
QSC 235 at [5] (McMurdo J); Grocon Constructors v Planit Cocciardi Joint Venture (No 2) [2009]
VSC 426 at [102], [107], [116] (Vickery J); cf O’Donnell Griffın Pty Ltd v John Holland Pty Ltd
[2009] WASC 19 at [122], [128].
63
Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [39]-[47]
(Mildren J); TransAustralian Construction Pty v Nilsen (SA) Pty Ltd (2008) 23 NTLR 123 at [42]-[43]
(Southwood J).
64
Mac-Attack (2009) 25 NTLR 14 at [13]-[14], citing Plaintiff S157/2002 v Commonwealth (2003)
211 CLR 476 at [57]; Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR
15; Craig v South Australia (1995) 184 CLR 163 at 179; Marbury v Madison 5 US (1 Cranch) 137
at 177 (1803); Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36.
Ford
(2010) 1 NTLJ 165174

Gaudron, McHugh, Gummow, Kirby and Hayne JJ where their Honours said:65
Thus, even on this general statement, a privative clause cannot protect against a
failure to make a decision required by the legislation in which that clause is found or
against a decision which, on its face, exceeds jurisdiction.
The general statement to which their Honours were referring was that of
Dixon J in R v Hickman; Ex parte Fox (1945) 70 CLR 598 where his Honour
said:66
The particular regulation is expressed in a manner that has grown familiar. Both
under Commonwealth law, and in jurisdictions where there is a unitary Constitution,
the interpretation of provisions of the general nature of reg 17 is well established.
They are not interpreted as meaning to set at large the courts or other judicial bodies
to whose decision they relate. Such a clause is interpreted as meaning that no decision
which is in fact given by the body concerned shall be invalidated on the ground that
it has not conformed to the requirements governing its proceedings or the exercise of
its authority or has not conﬁned its acts within the limits laid down by the instrument
giving it authority, provided always that its decision is a bona ﬁde attempt to exercise
its power, that it relates to the subject matter of the legislation, and that it is
reasonably capable of reference to the power given to the body.
Their Honours in Plaintiff S157/2002 emphasised that Dixon J’s comments
were not limited to the regulation under consideration, but applied to privative
clauses generally.67
Extent of review
While the ability of the Supreme Court to review a determination is
uncontroversial, the extent of the review is very much so. For example, in
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19 (O’Donnell
Griffın), Beech J held that prerogative relief is not available to correct errors
regarding compliance with statutory criteria in s 31(2)(a) of the WA Act68
because review of those errors was available in the SAT under s 46(1).69
In
Singapore, Prakash J held in SEF Construction Pte Ltd v Skoy Connected Pte Ltd
[2009] SGHC 257 (SEF Construction) that the availability of a statutory merits
review, with other factors, impliedly restricted judicial review in the High Court.
These and other decisions are discussed later.
Statutory misinterpretations invalidate determinations if
jurisdictional
Mildren J
Repeating for convenience part of his remarks in Mac-Attack quoted above,
Mildren J said:70
65
Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at [57].
66
R v Hickman; Ex parte Fox (1945) 70 CLR 598 at 614-615.
67
Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at [57].
68
NT Act, s 33(1)(a).
69
NT Act, s 47(1), granting a right of review in the Local Court.
70
Mac-Attack (2009) 25 NTLR 14 at [13], citing Plaintiff S157/2002 v Commonwealth (2003) 211
CLR 476 at [57]; Craig v South Australia (1995) 184 CLR 163 at 179.
(2010) 1 NTLJ 165 175

However, given the nature of the tribunal which the Act provides for, this provision
does not prevent the Court from declaring that a determination is void for
jurisdictional error of a kind where the tribunal wrongly construes the Act. … In my
opinion, an adjudicator cannot wrongly construe the Act on a question going to his
jurisdiction to decide the adjudication on the merits. (emphasis added)
Those comments have been highlighted because on their face they appear as
though they may conflict with a dictum of Hodgson JA71
in Coordinated
Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385
(Coordinated Construction Co) where his Honour said:72
It follows there was no error of the kind that, according to Brodyn Pty Ltd, could
invalidate a decision; and also that there was no unlawful act by an adjudicator
which, according to Project Blue Sky Inc, could justify the grant of an injunction. I
would add that in my opinion, if a determination is valid because the basic and
essential requirements of the Act are complied with, an error of law by the
adjudicator, even in interpreting the Act itself, would not make the determination
unlawful and thus liable to restraint by injunction. (emphasis added)
There may not be conflict between the two judicial statements, as
Hodgson JA may well have been referring to misinterpretations of the Act which
did not involve jurisdictional error. His Honour referred to determinations which
complied with the basic and essential requirements of the Act but which erred in
interpreting the Act. Invalidating errors according to Brodyn73
are those which
offend the basic and essential statutory requirements. There, Hodgson JA, with
Mason P and Giles JA agreeing, after listing what he saw as the “basic and
essential requirements” of the NT Act74
said:75
A question arises whether any non-compliance with any of these requirements has the
effect that a purported determination is void, that is, is not in truth an adjudicator’s
determination. That question has been approached in the first instance decision by
asking whether an error by the adjudicator in determining whether any of these
requirements is satisfied is a jurisdictional or non-jurisdictional error. I think that
approach has tended to cast the net too widely; and I think it is preferable to ask
whether a requirement being considered was intended by the legislature to be an
essential pre-condition for the existence of an adjudicator’s determination.
As Basten JA76
said in Coordinated Construction Co,77
“that description
reflects the concept of ‘jurisdictional error’ under the general law as identified in
71
Hodgson JA delivered the primary judgment in Brodyn v Davenport Pty Ltd (2004) 61 NSWLR
421, with Mason P and Giles JA agreeing.
72
Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385
at [46] from which special leave to appeal to the High Court was refused with Gleeson CJ giving the
judgment of the court saying in part: “The conclusion reached by the Court of Appeal, whilst not
inevitable, was well open to it and we are not persuaded that it is likely to be productive of injustice.
In those circumstances, we think that there is insufficient reason to doubt the correctness of the
decision of the Court of Appeal of New South Wales to warrant a grant of special leave to appeal to
this Court”: Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd [2006] HCATrans
9.
73
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421.
74
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [53].
75
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [54].
76
Who appeared in both Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR
611 and Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323.
Ford
(2010) 1 NTLJ 165176

Craig v South Australia and in Minister for Immigration and Multicultural Affairs
v Yusuf”. While that may be so, it seems clear from his remarks in Brodyn quoted
above that Hodgson JA intended it to mean something different, something
narrower. Indeed, the NSW Court of Appeal has confirmed this in Perform (NSW)
Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 (Perform) where Giles JA, with
whom McColl and Young JJA agreed, said:78
Brodyn Pty Ltd v Davenport disapproved the test of whether an adjudicator’s error is
jurisdictional or non-jurisdictional. The question is “whether a requirement being
considered was intended by the legislature to be an essential pre-condition for the
existence of an adjudicator’s determination”.
Strong support for the view that Hodgson JA was intending to exclude errors
of law in interpreting the Act from the grounds of review is found in the Court of
Appeal’s judgment in Perform where Giles JA said:79
The appellant did not invoke the possible qualification in relation to “misconstruing
the terms of the relevant legislation”. It could be said that the adjudicator’s error was
misconstruction of s 14(3), in that he considered that s 14(3) did not permit indication
by incorporation by reference. However, I do not think that an argument that such a
misconstruction vitiated the determination is consistent with the cases. Underlying the
invalidity of a determination only for want of “an essential precondition for the
existence of an adjudicator’s determination” … is that a determination may be valid
although the adjudicator has made an error of fact or law, and it has been accepted
that this includes error in the construction of the Act.
After referring to authorities to similar effect,80
his Honour identified a
situation where an error in interpreting the Act would vitiate a determination,
saying:81
Construction of the Act necessarily arises in the course of an adjudication, and in
accordance with Brodyn Pty Ltd v Davenport and subsequent cases incorrect
construction does not necessarily invalidate a determination. It could do so if the
construction negated an essential precondition as spoken of in Brodyn Pty Ltd v
Davenport, but the construction of s 14(3) as part of deciding what a payment
schedule indicates is not of that nature.
This, then, reconciles the statements of Mildren J with those of the NSW
Court of Appeal. Mildren J referred to errors in construing the NT Act on a
question going to jurisdiction, while the NSW Court of Appeal used the
terminology of negating an essential precondition. A question going to
jurisdiction would be an essential precondition.
77
Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385
at [71], citing Craig v South Australia (1995) 184 CLR 163 at 179; Minister for Immigration and
Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82].
78
Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [71]. Giles JA was a member
of the court in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 agreeing with Hodgson JA.
79
Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [71], citing Brodyn Pty Ltd v
Davenport (2004) 61 NSWLR 421 at [54].
80
Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [72]-[74], citing Minister for
Commerce v Contrax Plumbing (NSW) Pty Ltd [2005] NSWCA 142 at [49]; Transgrid v Siemens Ltd
(2004) 61 NSWLR 521 at [33]-[34]; Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW)
Pty Ltd (2005) 63 NSWLR 385 at [46]; Plaza West Pty Ltd v Simons Earthworks (NSW) Pty Ltd
[2008] NSWCA 279 at [27-[28].
81
Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [75].
(2010) 1 NTLJ 165 177

Error as to jurisdictional facts invalidates determination if
unreasonable or misinterprets Act
We come, then, to a divergence between the reasons of Mildren J and those of
Southwood J. Both held that errors of law going to jurisdiction will invalidate a
determination,82
but Southwood J effectively extended the comments to
jurisdictional facts as well as law. Since Riley J agreed with Southwood J, that
extension is the current law for the NT. However, it will be submitted that the
extension was by reference to authority which applies only to subpara (v) but not
to subparas (i) to (iii) of s 33(1)(a).
In the passage quoted above, Mildren J confined his comments to errors of
law going to jurisdiction.
Southwood J, on the other hand, said the following:83
The structure of subsection 33(1) of the Act is such that the jurisdiction of an
adjudicator to embark upon the adjudication of an application on the merits depends
upon the adjudicator in fact reaching a state of satisfaction that certain prescribed
criteria are met. The prescribed criteria being those set out in s 33(1)(a)(i) to (iv) of
the Act. If the criteria are not satisfied, the adjudicator must dismiss the application
without making a determination on the merits. The existence of such a state of
satisfaction is a condition precedent to an adjudicator embarking upon a consideration
of an application on the merits.
The statutory criteria set out in s 33(1)(a)(i) to (iv) are of such a nature that the
satisfaction of the adjudicator as to whether they have been fulfilled or not must be
both reasonable and founded upon a correct understanding of the law. A reasonable
and legally correct state of satisfaction is a necessary jurisdictional fact. If such a
jurisdictional fact does not exist, an adjudicator would be acting in excess of
jurisdiction if he made a determination of an application on the merits. The
adjudicator cannot give himself jurisdiction by erroneously deciding that the fact or
event exists. (emphasis added)
Those statutory criteria are matters of fact. Using the numbering of
s 33(1)(a), they are:
(i) whether the contract concerned is a construction contract;
(ii) whether the application has not been prepared and served in accordance with
section 28;
(iii) whether an arbitrator or other person or a court or other body dealing with a
matter arising under a construction contract makes an order, judgment or other
finding about the dispute that is the subject of the application; or
(iv) whether the adjudicator is satisfied it is not possible to fairly make a
determination –
(A) because of the complexity of the matter; or
(B) because the prescribed time or any extension of it is not sufficient for
another reason.
82
Mac-Attack (2009) 25 NTLR 14 at [13] (Mildren J); [33] (Southwood J); Riley J agreeing at [16].
83
Mac-Attack (2009) 25 NTLR 14 at [32]-[33], citing R v Judges of the Federal Court of Australia;
Ex parte Pilkington ACI (Operations) Pty Ltd (1978) 142 CLR 113 at 125; NT Act, s 33(1)(a); R v
Connell; Ex parte Hetton Bellbird Colleries Ltd (1944) 69 CLR 407 at 430; Buck v Bavone (1976)
135 CLR 110 at 118-119; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197
CLR 611 at [127]-[140]; R v Judges of the Federal Court of Australia; Ex parte WA National Football
League (1979) 143 CLR 190 at 214.
Ford
(2010) 1 NTLJ 165178

Under Southwood J’s reasoning, if an adjudicator comes to an incorrect
conclusion on one of those matters which is unreasonable or founded on an
incorrect understanding of the law, that error is a jurisdictional error.84
It is not
sufficient that there simply be an error as to the fact – the error must also be either
unreasonable or founded on an incorrect understanding of the law.
Illustrative of his Honour’s view are the matters which he held to be
jurisdictional errors in this case. Quoting from his Honour’s judgment,85
they are:
(1) while the first respondent did not attach the relevant payment claim to the
application, the second document described as Tax Invoice No 1461 provided
details of the relevant payment claim; (2) the relevant payment claim was the
claim made in the original document described as Tax Invoice No 1461; (3) the
payment claim was disputed by the appellant on or about 14 May 2009 when the
appellant sent Payment Schedule No 8 to the first respondent, Payment Schedule
No 8 served as a notice of dispute; (4) the application had been made within the
time stipulated by s 28(1) of the Act; and (5) the construction contract did not
prevent the applicant from making more than one payment claim in respect of
the same payment item.
His Honour described each as an error of law involving a misinterpretation
of the relevant provisions of the Act,86
making each a jurisdictional error.87
The
misinterpretations of the statute for each finding were (using the same numbering
as above):
1. the purported payment claim attached to the application was not the payment
claim contemplated by s 8, which does not permit more than one application
for each item claimed, with the result that the application did not comply
with s 28(2)(b)(ii);88
2. the purported payment claim on which the application was based was not
within the definition of “payment claim” under the Act89
(because s 8 does
not contemplate more than one payment claim for each item of work);90
3. s 8 does not contemplate more than one payment claim for each item of
work, therefore the real, earlier, payment claim was disputed much earlier
than 14 May 2009;91
4. again, since s 8 does not contemplate more than one payment claim for each
item of work, time for the application expired earlier than the date the
application was made;92
84
See also his Honour’s judgment in Australian Crime Commission v LB (2009) 25 NTLR 30 at [31]
where the satisfaction of an examiner under the Australian Crime Commission Act 2002 (Cth) as to
the existence of jurisdictional preconditions such as the reasonableness of issuing a summons
arguably had to be reasonable and founded on a correct understanding of the law.
85
86
87
88
89
90
91
92
(2010) 1 NTLJ 165 179

5. neither the contract nor s 8 permitted more than one payment claim for each
item of work.93
It is clear that the same misinterpretation of the Act infected each finding,
namely that s 8 permitted more than one payment claim for each obligation under
the contract. If the thesis of this article is correct that the Act does not impliedly
exclude more than one payment claim for each contractual obligation, there
would not have been jurisdictional error, unless the ruling that the contract by its
silence permitted more than one such payment claim amounted to jurisdictional
error. This will be examined below.
The reasoning of the majority leaves open a challenge to a determination on
the basis that a factual error as to the existence of the criteria in s 33(1)(a), while
involving no misinterpretation of the Act, was unreasonable and was therefore a
vitiating jurisdictional error. This flows from Southwood J’s comments quoted
above and the authorities he cites. This also qualifies the dictum94
of Mildren J in
Independent Fire Sprinklers95
where his Honour said:
I consider that the structure and purposes of the Act do not support a conclusion that
an adjudicator is void if the adjudication wrongly concludes that the time limits have
been complied with.
On the reasoning of the majority in Mac-Attack, if the wrong conclusion that
the time limits have been complied with is unreasonable or founded on a
misinterpretation of the law, that error would be a jurisdictional error.
This is a refinement of Southwood J’s comments in TransAustralian
Construction where he said:96
That does not mean that an adjudicator is free to get the question about whether a
payment claim exists wrong. Whether there is a payment claim is a threshold question
which an adjudicator has the jurisdiction to determine, but if he makes an erroneous
decision in relation to that threshold question, then he steps outside his jurisdiction
and any subsequent purported determination is a nullity and is void.
His Honour there did not make the distinction between simply getting the
question wrong on the one hand and, on the other, coming to an unreasonable
conclusion or applying incorrect law. There is, of course, a difference between
time limits referred to by above and the existence of a payment claim being
considered by Southwood J. However, both are now effectively jurisdictional
since the time limits stem from the criterion in s 33(1)(a)(ii) that the application
comply with s 28. One of the requirements of s 28 is that the application be made
within 90 days of the payment dispute arising. By deploying the line of reasoning
in Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR
611 (Eshetu), a court is now able to attack an adjudicator’s conclusion as to
compliance with the time limits by saying his or her state of satisfaction was
93
94
His Honour’s comments in that case were obiter since he held in Independent Fire Sprinklers (NT)
Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [57] that the time limits had been complied with.
95
Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [48].
96
TransAustralian Construction Pty v Nilsen (SA) Pty Ltd (2008) 23 NTLR 123 at [46].
Ford
(2010) 1 NTLJ 165180

unreasonable or was founded on an incorrect understanding of the law.
Theoretically at least,97
this opens determinations to greater challenge than
previously understood.
As to what is an unreasonable state of satisfaction regarding the existence of
a jurisdictional fact, in the words of Gummow J in Eshetu, paraphrasing
Brennan J in Foley v Padley (1984) 154 CLR 349 and referring to other
authorities:98
the question for the court is not whether it would have formed the opinion in question
but whether the repository of the power could have formed the opinion reasonably.
Gummow J then quoted Gibbs J in Buck v Bavone (1976) 135 CLR 110
where his Honour said:99
In all such cases the authority must act in good faith; it cannot act merely arbitrarily
or capriciously. Moreover, a person affected will obtain relief from the courts if he
can show that the authority has misdirected itself in law or that it has failed to
consider matters that it was required to consider or has taken irrelevant matters into
account. Even if none of these things can be established, the courts will interfere if
the decision reached by the authority appears so unreasonable that no reasonable
authority could properly have arrived at it. However, where the matter of which the
authority is required to be satisfied is a matter of opinion or policy or taste it may be
very difficult to show that it has erred in one of these ways, or that its decision could
not reasonably have been reached.
Adjudicator’s state of satisfaction as to s 33(1)(a) criteria
jurisdictional precondition
Enabling the Eshetu line of reasoning to be applied, as quoted above,
Southwood J found that “[t]he existence of such a state of satisfaction is a
condition precedent to an adjudicator embarking upon a consideration of an
application on the merits”.100
This was despite the subsection not requiring the
adjudicator to be satisfied of the criteria in subparas (i) to (iii), but expressly
requiring his satisfaction as to criterion (iv). His Honour said that the nature of
the criteria were such that the adjudicator’s state of satisfaction had to be
reasonable and founded on correct law.101
It is submitted that these authorities only apply where an Act expressly
requires the decision-maker to be satisfied of a fact, to be of a certain opinion, or
97
It might be practically difficult to show that a conclusion was unreasonable to the requisite degree or
founded on a misunderstanding of the law: see Gibbs J in Buck v Bavone (1976) 135 CLR 110
at 118-119 quoted below.
98
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [134], citing
Foley v Padley (1984) 154 CLR 349 at 370; Avon Downs Pty Ltd v Federal Commissioner of Taxation
(1949) 78 CLR 353 at 360; Federal Commissioner of Taxation v Bayly (1952) 86 CLR 506 at 510;
Federal Commissioner of Taxation v Brian Hatch Timber Co (Sales) Pty Ltd (1972) 128 CLR 28
at 57; Buck v Bavone (1976) 135 CLR 110 at 118-119; Minister for Immigration and Ethnic Affairs v
Wu Shan Liang (1996) 185 CLR 259 at 274-276; Australian Heritage Commission v Mount Isa Mines
Ltd (1997) 187 CLR 297 at 303, 308.
99
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [136], citing
Buck v Bavone (1976) 135 CLR 110 at 118-119.
100
101
(2010) 1 NTLJ 165 181

similar. Those authorities do not apply where an Act simply requires the tribunal
to find that a fact exists or an event has occurred and does not make the state of
satisfaction or the holding of an opinion the precondition.
On occasion, as explained by Isaacs and Rich JJ in Bankstown Municipal
Council v Fripp (1919) 26 CLR 385 and referred to by Gummow J in Eshetu,102
with the object of preventing litigation on questions of jurisdictional fact, the
legislature may introduce into the criterion elements of opinion or belief by the
decision-maker. Where that occurs, it is not enough to set aside a decision that the
conclusion on that matter be wrong, even on a jurisdictional fact. To set aside a
decision where the jurisdictional fact is the decision-maker’s satisfaction as to a
matter, the state of satisfaction must be so unreasonable that no reasonable
decision-maker could hold it, or it must be based on an incorrect understanding of
the law.
But that principle only applies where the statute expressly requires the
decision-maker to be satisfied, or to hold an opinion, or similar. In the words of
Latham CJ in R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69
CLR 407 (Connell) quoted by Gummow J:103
where the existence of a particular opinion is made a condition of the exercise of
power, legislation conferring the power is treated as referring to an opinion which is
such that it can be formed by a reasonable man who correctly understands the
meaning of the law under which he acts. If it is shown that the opinion actually
formed is not an opinion of this character, then the necessary opinion does not exist.
That was the case in each of the decisions referred to by Gummow J, and in
Eshetu itself, where the section104
required the Minister to grant a visa “if
satisfied” of certain criteria. In Connell,105
the jurisdictional fact turned upon the
question whether the decision-maker had been properly “satisfied” as to certain
rates of remuneration.106
In Bankstown Municipal Council v Fripp and Foley v
Padley it was the “opinion of the council” which was the jurisdictional fact. In
Buck v Bavone, in the sentence immediately preceding the passage quoted by
Gummow J and reproduced above, Gibbs J was referring to statutes empowering
a body to act “if it is satisfied of the existence of certain matters specified in the
statute”.107
In Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949)
78 CLR 353, it was the satisfaction of the Commissioner as to the existence of
certain facts.
Unlike subpara (iv), the statutory criteria in subparas (i) to (iii) of s 33(1)(a)
are not dependent on the adjudicator’s satisfaction as to their existence. They are
simply stated as matters of fact which must exist. Only when it comes to
subpara (iv) is the adjudicator’s satisfaction introduced. Section 33(1)(a) says:
102
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [130].
103
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [133], citing R
v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430.
104
Migration Act 1958 (Cth), s 65(1).
105
R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407.
106
Under the Coal Production (War-time) Act 1944 (Cth). See Gummow J in Minister for
Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [135].
107
Buck v Bavone (1976) 135 CLR 110 at 118.
Ford
(2010) 1 NTLJ 165182

(1) An appointed adjudicator must, within the prescribed time or any extension of it
under section 34(3)(a) –
(a) dismiss the application without making a determination of its merits if –
(i) the contract concerned is not a construction contract;
(ii) the application has not been prepared and served in accordance with
section 28;
(iii) an arbitrator or other person or a court or other body dealing with a
matter arising under a construction contract makes an order, judgment
or other finding about the dispute that is the subject of the application;
or
(iv) satisfied it is not possible to fairly make a determination –
(A) because of the complexity of the matter;
(B) because the prescribed time or any extension of it is not sufficient
for another reason.
The adjudicator’s satisfaction is not expressly necessary for the first three
criteria. Decisions on their existence do not fall within the more protected class of
decisions which can only be challenged on the basis of unreasonableness or
misinterpretation of the law.
In the passage quoted above, Southwood J said108
that the structure of
s 33(1) and the nature of the criteria were such that the existence of the
adjudicator’s state of satisfaction as to the existence of the statutory criteria is a
condition precedent to the adjudicator embarking upon a consideration of an
application on the merits. This is true only in the sense that a fact-finder must be
satisfied of the existence of facts to make his or her decision. Every
decision-maker must be satisfied or not satisfied of the existence of facts. But that
does not place those decisions in the class where it is the decision-maker’s state
of satisfaction which is the condition precedent and the jurisdictional fact. To do
so requires words of the statute stating that the decision is dependent on the
tribunal’s being “satisfied” as to specified matters, or being of a specified opinion,
or similar. If such terminology is not used, it is the existence of the fact that is
determinative, not the tribunal’s state of satisfaction as to its existence. It is
respectfully submitted that more in the way of express words is needed to attract
the operation of those authorities than the structure of the section and the nature
of the criteria.
Telling against this interpretation is the legislature’s making the adjudicator’s
satisfaction a precondition in relation to the two criteria in subpara (iv), but not in
relation to the preceding criteria. The word “satisfied” could have been placed
before all of the subparagraphs had it been Parliament’s intention to make the
adjudicator’s state of satisfaction the precondition in relation to the first three
criteria as well as the last. On ordinary rules of construction, the deliberate
placement of the word elsewhere indicates a contrary intention.
It is submitted that Mildren J’s approach is to be preferred and that decisions
on the existence of the first three criteria may be challenged on the simple basis
that they are simply wrong (if they are jurisdictional or part of the basic and
essential requirements of the Act).
108
Mac-Attack (2009) 25 NTLR 14 at [32]-[33].
(2010) 1 NTLJ 165 183

Having said that Mildren J’s comments in Independent Fire Sprinklers109
were obiter, it must also be observed that the comments of the majority in
Mac-Attack as they apply to unreasonable factual findings of jurisdictional
preconditions are also obiter, since both Mildren J110
and Southwood J111
held
that the errors in that case involved a misinterpretation of the Act. However, the
statements of Southwood J simply repeat the formula devised by the High Court
in the cases cited and there is no warrant to separate unreasonable factual findings
from the misapplications of law referred to in that formula. It is suggested that,
while admittedly difficult to sustain, challenges to determinations are now clearly
open based on unreasonable factual errors about the jurisdictional matters in s 33
(and conceivably wherever else jurisdictional preconditions can be identified in
the Act).
Supreme Court may review determinations on s 33(1)(a)
criteria
Although not specifically addressed, because the court entertained the challenge
on the basis of the s 33(1)(a) criterion, it is obvious the court considered such a
review was open. This is contrary to authority in WA and, indirectly, in
Singapore.
Western Australia
In WA, Beech J held in O’Donnell Griffın112
that the privative clause in the WA
Act excluded prerogative relief in relation to conclusions as to the existence of
the criteria in s 31(2)(a) (equivalent to the NT Act, s 33(1)(a)), but permits review
in the SAT of dismissals of applications and failures to dismiss applications for
non-compliance with those criteria. Availability of review in the tribunal of a
decision not to dismiss for alleged failure to comply with the requirements was
pivotal to his Honour’s conclusion.
This was because the availability of statutory review of decisions dismissing
or not dismissing applications for failure to comply with the criteria indicated a
legislative intent to exclude prerogative relief.113
Critical to his Honour’s
conclusion was his view that a failure by an adjudicator to dismiss an application
for non-compliance with the statutory criteria was just as reviewable under
s 46(1) (equivalent to the NT Act, s 48(1)) as was a decision to dismiss. Those
sections are in pari materia, with the WA Act, s 46 saying:114
(1) A person who is aggrieved by a decision made under section 31(2)(a) may apply
to the State Administrative Tribunal for a review of the decision.
109
110
Mac-Attack (2009) 25 NTLR 14 at [13], [14].
111
112
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [122], [128].
113
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [121]-[122].
114
NT Act, s 48 says: (1) A person who is aggrieved by a decision made under section 33(1)(a) may
apply to the Local Court for a review of the decision. (2) If, on the review, the decision is set aside
and referred back to the adjudicator, the adjudicator must make a determination under section 33(1)(b)
within 10 working days after the date on which the decision is set aside or any extension of that time
agreed on by the parties. (3) Except as provided by subsection (1), a decision or determination of an
Ford
(2010) 1 NTLJ 165184

(2) If, on a review, a decision made under section 31(2)(a) is set aside and, under the
State Administrative Tribunal Act 2004 section 29(3)(c)(i) or (ii), is reversed the
adjudicator is to make a determination under section 31(2)(b) within 14 days
after the date on which the decision under section 31(2)(a) was reversed or any
extension of that time consented to by the parties.
(3) Except as provided by subsection (1) a decision or determination of an
Beech J held that a refusal to dismiss an application for alleged failure to
comply with the statutory criteria was a “decision” within the meaning of s 46(1)
just as much as a more obvious decision to dismiss for failure to comply.115
This
means that a respondent who fails before the adjudicator to have an application
dismissed for failure to comply with the WA Act, s 31(2)(a) or the NT Act,
s 33(1)(a) may have that decision reviewed. Such an avenue is significant since a
review is de novo116
and the SAT or Local Court is not therefore confined to the
grounds of jurisdictional error.
O’Donnell Griffın is of interest for at least three other reasons. They are that:
(1) the alleged error by the adjudicator there could have been described as a
misinterpretation of the Act,117
yet Beech J found that judicial review for
jurisdictional error was not available; (2) his Honour made no reference to the
adjudicator’s state of satisfaction of compliance with the criteria as the
determining condition;118
and (3) his Honour said that the mandatory requirement
on an adjudicator to dismiss an application which does not comply with the
statutory criteria119
“reveals an intention that the non-existence of those
conditions is fundamental and essential to an adjudication application”.120
Nothing further need be said about the first two. Holding that the
non-existence of the statutory criteria is fundamental and essential to an
adjudication application is interesting because (1) that would bring the issue of
compliance with time limits121
squarely within the Brodyn formulation of matters
which will nullify a determination, yet (2) the NT Supreme Court holds that the
time limits are not one of the basic and essential requirements.122
Confirming this
approach in Mac-Attack, Mildren J said an error of an adjudicator as to
115
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [119]-[120].
116
NT Act, s 60(2); State Administrative Tribunal Act 2004 (WA), s 27(1). See also O’Donnell Griffın
Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [122] referring to “merits review” in the SAT.
117
Namely, does a progress claim that comprises a number of individual claims constitute one
payment claim, or a number of payment claims within the definition of the Act? (see O’Donnell
Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [68]). A subsidiary question was whether
the substance of the definition of “payment dispute” is only to identify the time at which a payment
dispute arises, or is it also to identify the content of the dispute? (see O’Donnell Griffın Pty Ltd v John
Holland Pty Ltd [2009] WASC 19 at [75]).
118
Of course, this may be because it was not argued. It does not necessarily mean his Honour would
have disagreed with Southwood J in Mac-Attack (2009) 25 NTLR 14.
119
NT Act, s 33(1)(a); WA Act, s 31(2)(a).
120
O’Donnell Griffın Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [120].
121
NT Act, s 28(1); WA Act, s 26(1).
122
Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [48]; Trial
decision (2009) 25 NTLR 1 at [35].
(2010) 1 NTLJ 165 185

compliance with time limits would be non-jurisdictional error.123
While possibly
this latter comment could be explained on the basis of whatever difference there
is between the basic and essential requirements of the Act, and those which go to
jurisdiction, this is unlikely. It is more likely that his Honour remained of the
view that the time limits were not basic and essential to a valid determination.
Considerable conflict therefore exists between the WA and NT approaches,
such as:
1. In the NT, prerogative relief is available to correct errors as to compliance
with the statutory criteria in s 33(1)(a).124
It is not in WA.
2. In WA, a decision not to dismiss an application for non-compliance with the
statutory criteria in s 31(2)(a)125
is reviewable under s 46(1).126
This has not
been decided in the NT, although on the reasoning in O’Donnell Griffın this
right of review is inimical to the availability of prerogative relief.
3. In WA, the time limits in s 26(1)127
are “fundamental and essential to an
adjudication application” whereas in the NT they are not.
O’Donnell Griffın was not referred to in Mac-Attack. Stifling the hearing in
the Supreme Court in favour of a review in the Local Court may or may not have
assisted the respondent, depending on whether the Local Court would find the Act
impliedly excluded amounts being claimed in successive invoices. This may be
thought unlikely.
Singapore
The Singapore legislation contemplates two reviews. One is the express right to a
full merits review by an adjudicator or panel of adjudicators of determinations
over a prescribed value128
on the application of an unsuccessful respondent.129
The other is indirect, by the Act’s requirement that a party pay into court the
amount he130
is required to pay when he “commences proceedings to set aside
the adjudication determination or the judgment obtained” thereon.131
While not expressly conferring a right of review, this latter section
contemplates reviews on undefined grounds. In SEF Construction,132
Prakash J
held that determinations could be set aside for failing to comply with the basic
requirements of the Act133
and for denying natural justice,134
but not for failing to
123
124
WA Act, s 31(2)(a).
125
NT Act, s 33(1)(a).
126
NT Act, s 47(1).
127
NT Act, s 28(1).
128
Currently $100,000 under reg 10 of the Building and Construction Industry Security of Payment
Regulations 2005 (Sing).
129
Singapore Act, s 18.
130
The Singapore Act uses the masculine pronoun.
131
Singapore Act, s 27(5).
132
SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 at [27], [38], [40]-[42].
133
Applying Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421.
134
Because according natural justice was expressly required by Singapore Act, s 16(3).
Ford
(2010) 1 NTLJ 165186

act bona fide. Her Honour said:135
Thus, I consider that an application to the court under s 27(5) must concern itself
with, and the court’s role must be limited to, determining the existence of the
following basic requirements:
(a) the existence of a contract between the claimant and the respondent, to which the
SOP Act applies (s 4);
(b) the service by the claimant on the respondent of a payment claim (s 10);
(c) the making of an adjudication application by the claimant to an authorised
nominating body (s 13);
(d) the reference of the application to an eligible adjudicator who agrees to
determine the adjudication application (s 14);
(e) the determination by the adjudicator of the application within the specified
period by determining the adjudicated amount (if any) to be paid by the
respondent to the claimant; the date on which the adjudicated amount is payable;
the interest payable on the adjudicated amount and the proportion of the costs
payable by each party to the adjudication (ss 17(1) and (2));
(f) whether the adjudicator acted independently and impartially and in a timely
manner and complied with the principles of natural justice in accordance with
s 16(3); and
(g) in the case where a review adjudicator or panel of adjudicators has been
appointed, whether the same conditions existed, mutandis mutandi, as under (a)
to (f) above.
After reviewing the Australian136
and the United Kingdom137
authorities, her
Honour came to the conclusion that it was not necessary to import the New South
Wales requirement that the adjudicator act bona fide, saying:138
There is no need in the Singapore context to import a duty to act bona fide from
administrative law because the SOP Act is very clear in s 16(3) as to the way in
which the adjudicator must conduct the arbitration. It mandates that he must act
independently, impartially and in a timely manner; avoid incurring unnecessary
expense and comply with the principles of natural justice. The legislature having so
prescribed the manner in which the adjudicator must behave, it is entirely otiose to
add an additional requirement that he must exercise his powers in a bona fide manner.
Although not referring to O’Donnell Griffın or expressly to the line of
reasoning that a statutory right of review impliedly limits judicial review, the
availability to a respondent of a merits review under s 18,139
the absence of a
right of appeal,140
and the interim nature of determinations,141
were relevant in
coming to the conclusion that judicial review was restricted to the grounds
mentioned.
135
SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 at [45].
136
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421; Timwin Construction Pty Ltd v Facade
Innovations Pty Ltd [2005] NSWSC 548; Lanskey Constructions Pty Ltd v Noxequin Pty Ltd (in liq)
[2005] NSWSC 963; Trysams Pty Ltd v Club Constructions (NSW) Pty Ltd [2007] NSWSC 941;
Reiby Street Apartments Pty Ltd v Winterton Constructions Pty Ltd [2006] NSWSC 375.
137
Ballast plc v Burrell Co (Construction Management) Ltd [2001] BLR 529.
138
139
SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 at [38], [41].
140
141
(2010) 1 NTLJ 165 187

Act impliedly prohibits multiple claims
Combining and summarising the reasons of Mildren J and Southwood J on this
point, the court held:
1. section 33(1)(a)(ii) requires an application to be dismissed unless it is made
within 90 days of a payment dispute arising;142
2. a payment dispute arises under s 8, relevantly, when a payment claim
remains unpaid in full or is disputed when it is due to be paid under the
contract;143
3. section 8 does not envisage or contemplate the re-triggering of a payment
dispute by the resubmission or reformulation of payment claims;144
4. the purpose of the Act would be defeated if the 90-day period could be
revived by delivering successive payment claims for the same amounts.145
Mildren J said:146
In my opinion, the Act does not envisage that a payment claim which includes a
claim which has already been the subject of a previous payment claim, but which is
out of time for the purposes of s 28 to be available for adjudication. If the Act
intended repeat claims could be adjudicated, it would defeat the purpose of the 90 day
time limit. Furthermore, the Act makes no provision for an extension of time except
where s 39(2) of the Act applies and it is instructive to see what that provision
contemplates.
Under s 33(2) of the Act, if an application is not dismissed or determined by an
adjudicator within the prescribed time, it is taken to be dismissed when the time ends.
section 39(2) provides that in those circumstances, a further application may be made
within 28 days. There is no other provision of the Act allowing for a further
application in respect of the same payment claim. Furthermore, there is no power
given to an adjudicator (or to anyone else) to extend the 90 day time limit.
The critical sentence for present purposes is the penultimate that “[t]here is
no other provision of the Act allowing for a further application in respect of the
same payment claim” (emphasis added). It will be submitted that, while this
statement is undoubtedly correct, it is not “the same payment claim” where the
contract permits repeat claims for amounts outstanding from previous claims.
Such a claim is a fresh payment claim under the contract, recognised by the Act
and attended with all of the contractual and statutory consequences of a valid
payment claim.
While discussing ss 8, 10 and 28,147
Southwood J said:148
Section 8 of the Act speciﬁes the time when a payment dispute arises. The time when
a payment dispute arises cannot be deferred or retriggered by the inclusion in a
construction contract of clauses which make provision for the resubmission or
142
Mac-Attack (2009) 25 NTLR 14 at [2] (Mildren J), [31] (Southwood J).
143
144
145
Mac-Attack (2009) 25 NTLR 14 at [11] (Mildren J), [34] (Southwood J inferentially).
146
Mac-Attack (2009) 25 NTLR 14 at [11]-[12] (Mildren J).
147
Mac-Attack (2009) 25 NTLR 14 at [36]-[42].
148
Ford
(2010) 1 NTLJ 165188

reformulation of a payment claim. section 8 of the Act does not contemplate the
re-triggering of a payment dispute by the resubmission or reformulation of payment
claims. The section makes no provision for repeat payment claims.
Neither of their Honours relied on express words in the Act to arrive at their
conclusion, using instead such phrases as “the Act does not envisage” and “the
Act does not contemplate”.
It is respectfully submitted that another course was open to the court by
relying on express words of the Act and the express intention of Parliament. That
course was to say that:
1. an application for adjudication must be made within 90 days after a payment
dispute arises;
2. a payment dispute arises under s 8, relevantly, when a payment claim
remains unpaid in full or is disputed when it is due to be paid under the
contract;
3. what is a payment claim is determined by the contract, by the definition of
payment claim;
4. when a payment claim may be made is determined by the contract, again by
the definition of payment claim;
5. how a payment claim may be made is determined by the contract;149
6. the content of a payment claim is determined by the contract;150
7. Parliament has therefore left it to the parties by their contract to determine
what may and may not be the subject of a payment claim;
8. if the parties by their contract expressly permit repeat claims to be made for
amounts unpaid from previous claims, each repeat claim complying with the
contract is a valid payment claim under the contract;
9. a valid payment claim under the contract is a valid payment claim under the
Act;
10. each valid payment claim under the contract can give rise to a payment
dispute under s 8 which in turn gives rise to an entitlement to apply for
adjudication.
The first two points are the same as those from Mac-Attack and are
unexceptional, being simply statements of the statutory requirements. More,
however, needs to be said about the second. As Kelly J emphasised in the trial
decision,151
and Southwood J in TransAustralian Construction,152
the NT Act
leaves the question of when a payment dispute arises to the contract (in other
words, to the parties). In words worth repeating, Southwood J said:153
If a construction contract contains a written provision about payment claims the Act
defines “payment claim” by reference to the terms of the construction contract
actually made by the parties (s 4). It is to that contract that the adjudicator must go to
149
Whether the parties make express provision or make no provision and terms are implied into the
contract by NT Act, s 19.
150
Again, whether the parties make express provision or make no provision and terms are implied into
the contract by NT Act, s 19.
151
152
153
(2010) 1 NTLJ 165 189

determine whether there is a “payment claim” and hence a “payment dispute” for
him to adjudicate. If the construction contract does not contain such a written
provision the Act implies into the contract the relevant contractual provisions in the
Schedule of the Act. (emphasis added)
Section 8 says:
A payment dispute arises if –
(a) when the amount claimed in a payment claim is due to be paid under the
contract, the amount has not been paid in full or the claim has been rejected or
wholly or partly disputed;
(b) when an amount retained by a party under the contract is due to be paid under
the contract, the amount has not been paid; or
(c) when any security held by a party under the contract is due to be returned under
the contract, the security has not been returned.
It is clear, as all have said, that the contract determines when a payment
dispute arises, by stating when a payment claim is to be paid.
The contract also determines how, when and in what form a payment claim
may be made. If the parties make no provision, the Act implies terms into the
contract,154
it does not simply legislate periods and methods. section 4 says:
“payment claim” means a claim made under a construction contract –
(a) by the contractor to the principal for payment of an amount in relation to the
performance by the contractor of its obligations under the contract; or
(b) by the principal to the contractor for payment of an amount in relation to the
performance or non-performance by the contractor of its obligations under the
contract.
It is evident that the Act leaves to the parties by their contract to determine
the timing, form and content of a payment claim.
This is why an ordinary invoice or progress claim often amounts to a
payment claim for the purposes of the Act. The only occasion on which such an
invoice would not amount to a payment claim under the Act is where the contract
does not make provision for “how” a payment claim is to be made,155
or where it
makes such proscriptive provision that an ordinary invoice would not comply. In
the former case, s 19 applies which says:
Making payment claims
The provisions in the Schedule, Division 4 are implied in a construction contract that
does not have a written provision about how a party must make a claim to another
party for payment.
Division 4 of the Schedule contains quite detailed particulars to be included
in a payment claim, namely:
Content of claim for payment
(1) A payment claim under this contract must –
(a) be in writing;
154
NT Act, s 19.
155
There can sometimes be a question as to whether a clause in a contract does in fact make provision
for “how” a payment claim is to be made or responded to. See, for example, Independent Fire
Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [23], [54]-[56]; Adjudicator’s
Determination 16.09.04 at [113]-[118], [122]-[134], available at http://www.nt.gov.au/justice/
policycoord/construction/determinations.shtml viewed 8 March 2010.
Ford
(2010) 1 NTLJ 165190

(b) be addressed to the party to which the claim is made;
(c) state the name of the claimant;
(d) state the date of the claim;
(e) state the amount claimed;
(f) for a claim by the contractor – itemise and describe the obligations the
contractor has performed and to which the claim relates in sufficient detail
for the principal to assess the claim;
(g) for a claim by the principal – describe the basis for the claim in sufficient
detail for the contractor to assess the claim;
(h) be signed by the claimant; and
(i) be given to the party to which the claim is made.
(2) For a claim by the contractor, the amount claimed must be calculated in
accordance with this contract or, if this contract does not provide a way of
calculating the amount, the amount claimed must be –
(a) if this contract states that the principal must pay the contractor one amount
(the contract sum) for the performance by the contractor of all of its
obligations under this contract (the total obligations) – the proportion of
the contract sum that is equal to the proportion that the obligations
performed and detailed in the claim are of the total obligations;
(b) if this contract states that the principal must pay the contractor in
accordance with rates stated in this contract – the value of the obligations
performed and detailed in the claim calculated by reference to the rates; or
(c) otherwise – a reasonable amount for the obligations performed and detailed
in the claim.
(3) Subclause (2) does not prevent the amount claimed in a progress claim from
being an aggregate of amounts calculated under one or more of subclause (2)(a),
(b) and (c).
Two things must be remembered about those requirements. They only apply
if the contract makes no provision about how a claim is to be made, and they
apply by being implied into the contract. It is suggested that this reinforces the
impression that Parliament intended to leave the making of payment claims and
occurrence of payment disputes as far as possible to the parties.
Eastern claim and dispute procedure signiﬁcantly different from
western
The procedure for creating a payment dispute is very different under the eastern
and western legislation. As has been explained earlier, the eastern Acts have a
statutory mechanism for making a claim and creating a payment dispute. Under
the western Acts, the contract determines how a claim is to be made and when a
dispute arises. Even where the contract as made between the parties is silent on
how a claim is made, the relevant Act does not directly legislate the method but
implies terms into the contract.156
This is a signiﬁcant difference between the two schemes. Under the eastern
Acts, an invoice or claim under the contract cannot be a claim for the purposes of
the Acts unless it states it is a claim under the relevant Act and contains all of the
required information or is in the prescribed form. A simple invoice or progress
claim under the contract cannot be a claim under the Acts. Such an invoice or
claim must be followed by a claim complying with the statute.
156
NT Act, s 19.
(2010) 1 NTLJ 165 191

Thus the eastern legislation intrudes into the claim and dispute area to a far
greater degree than does the western legislation. The eastern Acts create a
statutory mechanism for making claims and creating disputes for their purposes,
while the western Acts leave it to the parties to determine how a claim is made
and when a dispute arises.157
It is difficult to imagine how a party could accidentally make a security of
payment claim under the eastern legislation. While the form complying with the
relevant Act might inadvertently be used instead of a simple invoice or claim
under the contract, the very heading of the form would alert the claimant to its
significance under the relevant Act.
That is different from the western legislation where a simple invoice can
frequently and unintentionally amount to a claim under the relevant Act. Parties
unaware of the requirements of the Act – or lack of requirements – as to the
content of a claim can inadvertently lay the foundation for time starting to run for
making an application by delivering a simple invoice. As soon as time for
payment passes without payment being made, or the invoice is disputed, a
payment dispute arises and time begins to run for making an application. It is not
uncommon when advising claimants or when adjudicating disputes to find that
time for making an application has expired because a simple invoice has led to a
payment dispute beyond the time limit. This is so even given the essential
requirements of a payment claim stated by Southwood J in TransAustralian
Construction as being:158
1. The payment claim must be made pursuant to a construction contract and not
some other contract;
2. The payment claim must be in writing;
3. The payment claim must be a bona fide claim and not a fraudulent claim;
4. The payment claim must state the amount claimed;
5. The payment claim must identify and describe the obligations the contractor
claims to have performed and to which the amount claimed relates in sufficient
detail for the principal to consider if the payment claim should be paid, part paid
or disputed.
Judges have emphasised the significant differences between the western and
the eastern legislation and cautioned applying the reasoning of one to the other. In
Independent Fire Sprinklers,159
Mildren J said:160
There are very significant differences between the Building and Construction Industry
Security Payment Act 1999 (NSW) and the Construction Contracts (Security of
Payments) Act (NT). There is no equivalent s 33(1)(a) of the NT Act and there are a
number of other important differences. The NT Act is modelled on the Construction
Contracts Act 2004 (WA). Structurally, the WA Act and the NT Act bear little
157
The latter by reference to the time payment is due under the contract as the critical time for
determining when a dispute arises (except, arguably, where it is disputed before it is due). By stating
when payment is due, it is therefore up to the parties to determine when a dispute arises for the
purposes of the Act.
158
159
160
See also TransAustralian Construction Pty v Nilsen (SA) Pty Ltd (2008) 23 NTLR 123 at [57]
(Southwood J); Trial decision (2009) 25 NTLR 1 at [27] (Kelly J).
Ford
(2010) 1 NTLJ 165192

resemblance to the NSW, Victorian or Queensland Acts. Great care must be exercised
in relying on decisions from those jurisdictions as to the interpretation to be given to
the NT Act. Nevertheless, I consider that there is much guidance to be had on
questions of statutory interpretation and jurisdictional error.
This difference in the way payment claims are made under the two sets of
Acts is fundamental and has consequences for Mac-Attack. As Kelly J said in the
trial decision:161
The precise list of “basic and essential requirements” set out in paragraph [53] of
Brodyn needs to be treated with some caution when applied to the Northern Territory
Act which contains different provisions. In particular, the New South Wales Act is
based on a payment claim being made under the Act, whereas the starting point for
the Northern Territory Act is a payment dispute as defined in s 8: a payment dispute
arises when the amount claimed in a payment claim is due to be paid under the
contract and it has not been paid in full (or has been rejected or disputed). (original
emphasis)
It is the thesis of this article that the western Parliaments, unlike their eastern
counterparts, have left it to the parties by their contract to determine the timing,
number and content of payment claims, and that if they agree unpaid claims may
be repeated, a fresh adjudicable payment claim arises each time a complying
invoice is delivered.
Pausing here, it is important to make a distinction between three situations:
1. where the contract expressly permits invoices or claims to include unpaid
amounts from previous invoices or claims;
2. where the contract is silent on that point;
3. where the contract expressly forbids such redelivery.
These comments only apply to the first situation. Where the contract is silent
or forbids redelivery of previous invoices, the question does not arise because
there is no contractual right to redeliver a claim, and s 8 depends on such a
contractual right.
When an invoice is delivered in accordance with the contract, it is a payment
claim under the Act. When that payment claim is disputed or is not paid when
required by the contract, a payment dispute arises under s 8. If a second invoice is
delivered in accordance with the contract including an unpaid amount claimed in
the first invoice, that is a second payment claim. Leaving the Act aside for the
moment, it is a claim authorised by the contract because the parties have
expressly agreed that such invoices may be rendered. A second payment dispute
arises when the amounts claimed in the second invoice are disputed or not paid in
full.
Each disputed or unpaid payment claim, valid under the contract, gives rise
to a payment dispute as defined by the Act. Each payment dispute gives rise to an
entitlement to make an application for adjudication in respect of that dispute.
Viewed in that way, repeated claims for unpaid earlier claims are not the
same payment claim. Each is a fresh payment claim, valid under the contract,
giving rise to an obligation to pay under the contract, and therefore giving rise to
a payment dispute under the Act if disputed or not paid in full.
161
(2010) 1 NTLJ 165 193

Supporting the contention that Parliament in WA and the NT intended to
leave to the parties the questions of how and when payment claims were to be
made and when payment disputes were to arise are the ministerial comments
introducing the legislation. In the Second Reading Speech of the Bill in the NT,
the Minister for Justice and Attorney-General said:162
The legislation supports privity of contract between the parties. A party commission-
ing construction work must pay for the work. The obligation to pay cannot be made
contingent upon the party with that obligation being paid first under some separate
contract. The legislation prohibits “pay if paid” or “pay when paid” clauses in
construction contracts. Apart from prohibiting these particular practices, the bill does
not unduly restrict the normal commercial operation of the industry. The parties to a
construction contract will continue to be free to set their own contractual terms, as
long as they put those terms in writing and do not include these prohibited terms.
(emphasis added)
Parliament clearly intended minimal intrusion into commercial arrangements
between parties. That intention is directly expressed in the definition of “payment
claim” and in how a payment dispute arises.
It must be remembered that Parliament had the choice when it enacted the
NT Act to adopt all or part of the eastern legislation, with the NSW Act being
passed in 1999 and the NT Act in 2004. The legislature could, if it had wished,
used the framework of the WA Act but adopted the payment claim and payment
dispute mechanism of the NSW Act. In other words, it could have prescribed in
detail how a payment claim was to be made and how a payment dispute was to
arise. That choice was not merely theoretical – it was patent in the form of the
NSW Act and would have been workable within the framework of the WA Act.
While not a recognised guide to construing the NT Act, it is interesting to
note the Explanatory Memorandum to the WA Bill,163
bearing in mind the former
was modelled on the latter and follows it closely, particularly in relation to
payment claims and disputes. After only a very few introductory words, the
memorandum says:
In particular, [the Bill] is based on enforcing the contract between the parties and
does not introduce a separate, and possibly conflicting, statutory right to payment.
The Act applies to contracts for the carrying out of construction work and related
services. The Act also covers contracts for the provision of related professional
services and the supply of goods and materials to the construction site.
This reference to introducing a separate statutory right to payment is a
reference to the eastern legislation which does just that. For example, the NSW
Act says in s 14(4):164
(4) If:
(a) a claimant serves a payment claim on a respondent, and
(b) the respondent does not provide a payment schedule to the claimant:
(i) within the time required by the relevant construction contract, or
162
Northern Territory, n 10.
163
Explanatory Memorandum, Construction Contracts Bill 2004 (WA).
164
Vic Act, s 15(4); Qld Act, s 18(5). Singapore does not have an equivalent provision but relies on
the date for payment under the contract: see Singapore Act, s 12 and the calculation of the due date
for payment under s 8.
Ford
(2010) 1 NTLJ 165194

(ii) within 10 business days after the payment claim is served, whichever
time expires earlier,
the respondent becomes liable to pay the claimed amount to the claimant on
the due date for the progress payment to which the payment claim relates.
(emphasis added)
There can be little doubt that this is a statutory right to payment separate to
the contractual right and perhaps conflicting with it in some circumstances.
Reference to the due date for the progress payment does not make the obligation
imposed by the section contractual; that reference is simply to the date of the
contractual obligation for the purpose of fixing the date the statutory obligation
arises.
Further support for this interpretation is found in s 15 of the NSW Act165
which renders the amount a debt due, recoverable in court or by adjudication. The
first two subsections say:
(1) This section applies if the respondent:
(a) becomes liable to pay the claimed amount to the claimant under
section 14(4) as a consequence of having failed to provide a payment
schedule to the claimant within the time allowed by that section, and
(b) fails to pay the whole or any part of the claimed amount on or before the
due date for the progress payment to which the payment claim relates.
(2) In those circumstances, the claimant:
(a) may:
(i) recover the unpaid portion of the claimed amount from the respondent,
as a debt due to the claimant, in any court of competent jurisdiction, or
(ii) make an adjudication application under section 17(1)(b) in relation to
the payment claim, and
(b) may serve notice on the respondent of the claimant’s intention to suspend
carrying out construction work (or to suspend supplying related goods and
services) under the construction contract.
The WA Parliament was therefore at pains not to introduce this aspect of the
scheme, and to leave the payment obligations strictly contractual. In other words,
it left payment obligations to the parties, including the creation of those
obligations by way of payment claims and time for payment.
Continuing with the Explanatory Memorandum in a similar vein to the
NT Minister’s Second Reading Speech, the following paragraph says:
This legislation supports the privity of the contract between the parties. Where there
is no written contract covering the basic payment provisions of the right to be paid,
how to deal with variations, how to claim payment and how to dispute it, or the rate
of interest on late payments, the Act provides for fair and effective terms to be
implied into the contract. The Act also provides implied terms to deal with the
contentious issues of ownership of unfixed goods or materials when a contractor
becomes insolvent, and the status of retention moneys. This means the parties should
have clear contractual payment rights and obligations so that misunderstanding and
disputes are minimised.
Again, the Act leaves it to the contract to determine payment rights and
obligations, or implies basic terms into contracts silent on those matters.
165
Vic Act, s 16(2); Qld Act, s 18(2). Again, Singapore has no equivalent, instead giving in Singapore
Act, s 12 the claimant a right to make and adjudication application under s 13.
(2010) 1 NTLJ 165 195

These clear remarks from the NT and WA Parliaments support the contention
that they intended to leave the making of payment claims and the creation of
payment disputes to the parties, and did not intend to limit those rights and
obligations in any way not expressed in the Acts.
Eastern Acts permit repeat claims
The eastern Acts expressly permit repeat claims for amounts unpaid from earlier
claims. It might be argued that the NT Act’s silence on that point impliedly
excludes such repeat claims. With the emphasis here on the last two subsections,
s 13 of the NSW Act says:
(1) A person referred to in section 8(1) who is or who claims to be entitled to a
progress payment (the “claimant”) may serve a payment claim on the person
who, under the construction contract concerned, is or may be liable to make the
payment.
(2) A payment claim:
(a) must identify the construction work (or related goods and services) to
which the progress payment relates, and
(b) must indicate the amount of the progress payment that the claimant claims
to be due (the “claimed amount”), and
(c) must state that it is made under this Act.
(3) The claimed amount may include any amount:
(a) that the respondent is liable to pay the claimant under section 27(2A), or
(b) that is held under the construction contract by the respondent and that the
claimant claims is due for release.
(4) A payment claim may be served only within:
(a) the period determined by or in accordance with the terms of the
construction contract, or
(b) the period of 12 months after the construction work to which the claim
relates was last carried out (or the related goods and services to which the
claim relates were last supplied),
whichever is the later.
(5) A claimant cannot serve more than one payment claim in respect of each
reference date under the construction contract.
(6) However, subsection (5) does not prevent the claimant from including in a
payment claim an amount that has been the subject of a previous claim.
The argument might be made that the NT Parliament had the NSW legisla-
tion before it at the time it was considering a security of payment scheme and
chose not to include an express permission to deliver repeat claims. However, this
would overlook the fundamental difference between the two regimes on this
aspect. The eastern Acts create a statutory mechanism outside the contract for
making payment claims. If repeat claims are to be allowed, that must be
expressly stated in the statute creating the mechanism. The western Acts leave
payment claims and disputes to the contract. There is therefore no necessity for
those Acts to state whether repeat claims are permitted: that is dealt with in the
contract.
Section 13 of the NSW Act was considered recently by the NSW Court of
Appeal166
in Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69,
where the appellant made a payment claim for amounts which had already been
166
Allsop P, Macfarlan and Handley JJA.
Ford
(2010) 1 NTLJ 165196

the subject of an adjudication. When the District Court refused summary
judgment on the basis of the second payment claim, the appellant appealed to the
NSW Court of Appeal where it was naturally held that “the Act was not intended
to permit the repetitious use of the adjudication process to require an adjudicator
or successive adjudicators to execute the same statutory task in respect of the
same claim on successive occasions”.167
While their Honours spoke of the Act’s intention168
and matters which would
be contrary to the scheme169
and policy170
of the Act, they were able to do so on
the foundation of express and clear words such as s 13(5) quoted above. That is
an unambiguous prohibition against more than one payment claim for each
entitlement to make a claim. Such a bedrock provision is a safe basis for
impliedly prohibiting more than one adjudication for each payment claim,
especially when combined with the “central and pervading tenet of the judicial
system … that controversies, once resolved are not to be reopened except in a
few, narrowly deﬁned circumstances”.171
It is respectfully submitted that it is just this type of unambiguous language,
in combination with a central tenet of the judicial system, which is lacking to
support an implied prohibition in the NT Act against repeating payment claims.
On the contrary – it is suggested that the implication offends a central tenet rather
than being bolstered by one.
Statutory implications only where necessary
In Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106,
after repeating Dixon CJ’s statement that courts should be not fearful about
making implications in statutes,172
Mason CJ said:173
It may not be right to say that no implication will be made unless it is necessary. In
cases where the implication is sought to be derived from the actual terms of the
Constitution it may be sufficient that the relevant intention is manifested according to
the accepted principles of interpretation. However, where the implication is structural
rather than textual it is no doubt correct to say that the term sought to be implied must
be logically or practically necessary for the preservation of the integrity of that
structure.
Two arguments may be founded on that statement. The ﬁrst is that the
implied prohibition against multiple claims is clearly structural and that is neither
logically nor practically necessary for the preservation of the integrity of the
structure. As explained in this section, the structure of the Act and of the scheme
167
Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 at [2] (Allsop P), agreeing
with Macfarlan JA with whom Handley JA agreed.
168
Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 at [2], [16] (Allsop P), [18],
[60], [67] (Macfarlan JA).
169
Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 at [60] (Macfarlan JA).
170
Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 at [70] (Macfarlan JA).
171
D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [34] (Gleeson CJ, Gummow, Hayne
and Heydon JJ).
172
Lamshed v Lake (1945) 99 CLR 132 at 144.
173
Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 135.
(2010) 1 NTLJ 165 197

it created is better preserved according to the plain meaning of the words, the
extraneous materials and the statutory purpose.
The second argument is that, if the implication is not textual rather than
structural, the relevant intention is not manifested, on the same materials and for
the same reasons advanced above.
Illustration of the level of necessity or intention for an implication may be
found in that case and the related ones of Nationwide News Pty Ltd v Wills (1992)
177 CLR 1 and Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104.
In those three cases, the High Court found a freedom of discussion of government
and political matters to be implied in the Constitution.174
Founding that
implication was the system of representative government expressed in and
created by the Constitution, which in the words of Deane and Toohey JJ in
Nationwide News Pty Ltd v Wills:175
presupposes an ability of represented and representatives to communicate information,
needs, views, explanations and advice. It also presupposes an ability of the people of
the Commonwealth as a whole to communicate, among themselves, information and
opinions about matters relevant to the exercise and discharge of governmental powers
and functions on their behalf.
Perhaps even more strongly, Mason CJ said in Australian Capital Television Pty
Ltd v Commonwealth:176
Freedom of communication as an indispensable element in representative government.
These comments – that the term to be implied was presupposed by or
indispensable to the statute – are indicative of the level of necessity or intention
for the implication of a provision in an Act. It is suggested that neither applies to
imply into the Act a term that only one payment claim may be made for each
item of contractual obligation in a construction contract. Cooper Brookes
(Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
supports the contention that an implication is only to be made where necessary,
with Mason and Wilson JJ referring to “necessary implication”.177
With respect, the same could be said of the NT Court of Appeal’s approach
here as was said recently by French CJ, reversing its decision in Commissioner of
Territory Revenue v Alcan (NT) Alumina Pty Ltd (2008) 24 NTLR 33. The Chief
Justice said:178
The Court of Appeal in this case construed the Act by reference to an imputed
legislative intention reﬂecting a revenue-maximising approach to taxing statutes
which paid insufficient regard to the clear words of the Act.
Fundamental rights not to be curtailed without clear language
Parliament is generally taken to intend the least intrusion into private affairs
necessary to effect the statutory purpose. If that purpose can be fulﬁlled in two
174
See Mason CJ, Toohey and Gaudron JJ in Theophanous v Herald & Weekly Times Ltd (1994) 182
CLR 104 at 121-122.
175
Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 72.
176
Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 138.
177
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
at 322.
178
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [5].
Ford
(2010) 1 NTLJ 165198

ways, one which impinges on private affairs greater than another, all things being
equal the courts will prefer the interpretation involving least intrusion. In Plaintiff
S157/2002,179
Gleeson CJ said concerning a privative clause in the Migration Act
1958 (Cth):
courts do not impute to the legislature an intention to abrogate or curtail fundamental
rights or freedoms unless such an intention is clearly manifested by unmistakable and
unambiguous language. General words will rarely be sufficient for that purpose. What
courts will look for is a clear indication that the legislature has directed its attention to
the rights or freedoms in question, and has consciously decided upon abrogation or
curtailment. As Lord Hoffmann recently pointed out in the United Kingdom, for
parliament squarely to confront such an issue may involve a political cost, but in the
absence of express language or necessary implication, even the most general words
are taken to be “subject to the basic rights of the individual”.
Contenders might fasten on the words “necessary implication” to argue that
limiting claims was necessarily implied in the Act. When, however, Parliament
has speciﬁcally considered which contractual provisions should be prohibited and
has chosen not to prohibit this provision,180
and when the absence of the
implication supports the scheme equally as well, and when there is another, less
radical and intrusive course open to resolve the instant dispute, that phrase is but
a bruised reed. As Mason CJ, Brennan, Dawson, Gaudron and McHugh JJ said in
Coco v The Queen (1994) 179 CLR 427, those words do little more than
emphasise that the test is a very stringent one, referring to Bropho v Western
Australia (1990) 171 CLR 1 and going on to say:181
As we remarked earlier, in some circumstances the presumption may be displaced by
an implication if it is necessary to prevent the statutory provisions from becoming
inoperative or meaningless.
It is respectfully suggested that the relevant provisions of the NT Act would
not become inoperative or meaningless without the implication that no amount
claimed under a contract could be the subject of more than one payment claim.
In Coco v The Queen, their Honours said:182
The insistence on express authorization of an abrogation or curtailment of a
fundamental right, freedom or immunity must be understood as a requirement for
some manifestation or indication that the legislature has not only directed its attention
to the question of the abrogation or curtailment of such basic rights, freedoms or
immunities but has also determined upon abrogation or curtailment of them. The
courts should not impute to the legislature an intention to interfere with fundamental
rights. Such an intention must be clearly manifested by unmistakable and
unambiguous language. General words will rarely be sufficient for that purpose if
179
Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at [30], citing Coco v The Queen
(1994) 179 CLR 427; R v Home Secretary; Ex parte Simms [2000] 2 AC 115; Annetts v McCann
(1990) 170 CLR 596.
180
See a similar line of reasoning by Vickery J in Grocon Constructors Pty Ltd v Planit Cocciardi
Joint Venture (No 2) [2009] VSC 426 at [97].
181
Coco v The Queen (1994) 179 CLR 427 at 438, citing Bropho v Western Australia (1990) 171
CLR 1 at 16-17.
182
Coco v The Queen (1994) 179 CLR 427 at 437.
(2010) 1 NTLJ 165 199

they do not specifically deal with the question because, in the context in which they
appear, they will often be ambiguous on the aspect of interference with fundamental
rights.
Freedom to contract is a fundamental freedom with Lord Hope of Craighead,
speaking for the House of Lords,183
describing it as a “great principle”.184
To
curtail such a freedom by preventing parties from permitting each other to make
repeat claims is a significant incursion into commercial contracts. Considerable
rights attach to the ability to repeat claims, including to bring proceedings within
limitation periods.
Giving that philosophy application here, the approach having least effect on
domestic and commercial affairs is that which accords with the express words of
the relevant Act and of the Parliament(s), and leaves it to the contracts to
determine whether unpaid claims may be redelivered.
Section 10 nullifies offending provisions
Of particular importance in the context of affecting private rights, it is to be
remembered that s 10 of the NT Act renders of no effect a provision in a contract
“that purports to exclude, modify or restrict the operation of this Act”. Section 10
says:
(1) A provision in an agreement or arrangement (whether a construction contract or
not and whether in writing or not) that purports to exclude, modify or restrict the
operation of this Act has no effect.
(2) A provision in an agreement or arrangement that has no effect because of
subsection (1) does not prejudice or affect the operation of other provisions of
the agreement or arrangement.
(3) Any purported waiver (whether in a construction contract or not and whether or
not in writing) of an entitlement under this Act has no effect.
This means that the offending provision has no effect for the purposes of the
contract as well as for the purposes of the NT Act. So a provision that parties may
include unpaid amounts from earlier claims in later claims is not only ineffective
for creating a payment dispute under the NT Act, it is also ineffective for all
purposes under the contract, such as reviving a limitation period for any of the
typical contractual dispute resolution process of negotiation, mediation and
arbitration, and it is also ineffective for reviving the limitation period for a cause
of action in contract. This is a significant inroad into the parties’ freedom to
contract and to regulate their own commercial affairs.
It is suggested that this goes much further than Parliament would have
intended, bearing in mind the comments of the Minister and the Attorney-
General. One would have thought that if Parliament had intended such a drastic
effect, it would have included in the list of prohibited provisions those allowing
claims to be repeated. Parliament paused and considered those provisions which
should be prohibited and stated them in a special division of the Act.185
It also
allowed by s 14 other provisions to be prohibited by regulation. Even with that
forethought and facility, the legislature did not see it necessary to prohibit repeat
claims.
183
Lord Browne-Wilkinson, Lord Jauncey of Tullichettle, Lord Mustill and Lord Steyn.
184
Sidhu v British Airways plc [1997] AC 430 at 453.
185
NT Act, Pt 2, Div 1, ss 12-14.
Ford
(2010) 1 NTLJ 165200

All of these indicia, it is suggested, point to the fact that implying a term into
the NT Act that repeat claims are not permitted contradicts Parliament’s intention.
Effect on non-construction contracts
This is a convenient point to deal with the ramifications of the court’s decision
beyond construction contracts. Section 10 renders of no effect a provision in a
contract “that purports to exclude, modify or restrict the operation of this Act”.
That prohibition extends beyond construction contracts to all types of contracts
by the parenthetical insertion of the words in s 10(1) “whether a construction
contract or not and whether in writing or not”, however, that is necessarily
limited to provisions which purport to exclude, modify or restrict the operation of
the Act. A provision could only do so if it was in some way related to a
construction contract so that it had an operation on the construction contract, such
as a tripartite agreement connected to construction. Otherwise the contract would
be unaffected by the operation of the Act and vice versa.
This strengthens the argument that Parliament’s intention was not impliedly
to restrict claimants to one claim for each contractual obligation where the parties
expressly permitted more than one claim. The implied restriction has wider
ramifications to other, related contracts, not just to construction contracts. It is
suggested Parliament would not have intended such a broad consequence if it did
not express it in the NT Act.
Defeating the 90-day time limit for applications
Allowing claims to be repeated where the contract expressly permits would
enable applications to be made for claims which had been made earlier and for
which the time limit had expired. It might be said that this would defeat the time
limit imposed by the NT Act and leave it open to a claimant to redeliver a claim
at any time.
The first response is that the NT Act does not expressly forbid repeat claims.
They were not something Parliament was troubled to exclude even though it had
before it the NSW and other Acts which expressly referred to repeat claims. The
second response is that Parliament has left it to the parties to determine when and
how claims are to be made and disputes arise. If the parties by their contract have
expressly chosen to permit each other to redeliver unpaid or disputed claims,
allowing an application for those fresh claims works no injustice to anybody. In
fact, quite to the contrary. The Act has greater application and the parties have
available to them the statutory dispute resolution mechanism. As Southwood J
said in TransAustralian Construction, explaining why not every failure to comply
with the Act will invalidate a determination:186
The object of the Act is to promote security of payments under construction contracts.
The object of the Act is to be achieved by facilitating timely payments between the
parties to construction contracts; providing for the rapid resolution of payment
disputes arising under construction contracts; and providing mechanisms for the rapid
recovery of payments under construction contracts.
It is to be borne in mind that these comments only apply where the contract
expressly permits redelivery of unpaid or disputed claims. By agreeing to that
186
(2010) 1 NTLJ 165 201

term, the parties must be taken to have contemplated – if not intended – that the
security of payment regime would apply to the fresh claims created by any
redelivery. A claimant cannot simply redeliver a disputed claim if there is no
contractual right to do so. The respondent is already on notice about the claim,
having received it and either disputed or not paid it earlier.
The 90-day time limit might be revived for repeat claims, but only where the
parties have permitted such claims and in the statutory context of Parliament
leaving claim-making to the parties. Having left claim-making to the parties, and
having declined to interfere when it had the clear chance to do so, Parliament
should be taken to have intended that parties have the right to bring fresh
applications for fresh disputes founded on contractually permitted repeat claims.
One matter worth recalling is that Parliament increased the time for making
applications over that originally allowed when the NT Act was introduced. Until
2007, the time for making an application for adjudication was 28 days from the
date the payment dispute arose. In that year, it was increased to 90 days,187
a
threefold increase, demonstrating a clear legislative intent to make the
adjudication facility available in many more situations. Representations had been
made by the Construction Contracts Registrar,188
and to him by adjudicators and
industry bodies, to increase the time as the 28-day limit was restricting the
adjudication procedure unduly. Parliament’s response indicates a general intent to
make adjudications more available, not less.
Reading words into statute
What the Court of Appeal effectively did in the Mac-Attack case was to imply
words into the NT Act to the effect that no amount claimed under a contract could
be the subject of more than one payment claim. Those words could be placed in
the definition of “payment claim” in the form of an exclusion, in s 8 depriving
repeat claims of the power to create a payment dispute, as one of the prohibited
provisions in Pt 2, Div 1, in s 28 under the heading “Who may apply for
adjudication” as an exclusion, in s 28 under the heading “Applying for
adjudication” as an exclusion, or as a stand-alone provision.
The High Court has established clear guidelines for reading words into a
statute. In the words of Southwood J in Director of Public Prosecutions v Ahwan
17 NTLR 1:189
Words should only be “read into a statute” if three conditions are fulfilled. First the
court must know from a consideration of the legislation read as a whole, precisely
what the mischief was that it was the purpose of the legislation to remedy. Secondly,
the court must be satisfied by inadvertence Parliament has overlooked an eventually
which must be dealt with if the purpose of the legislation is to be achieved. Thirdly,
the court must be able to state with certainty what words parliament would have used
to overcome the omission if its attention had been drawn to the defect: Mills v
Meeking (1990) 169 CLR 214 at 244.
187
By Justice Legislation Amendment Act (No 2) 2007 (NT), s 4.
188
Established by NT Act, s 4; WA Act, s 47.
189
Director of Public Prosecutions v Ahwan 17 NTLR 1 at [42] (Southwood J dissenting, but not on
this statement of the law). His Honour’s comments are not affected by the High Court’s refusal of
special leave to appeal in Ahwan v Director of Public Prosecutions [2006] HCATrans 349.
Ford
(2010) 1 NTLJ 165202

While there is no doubt the court knew the mischief or purpose of the NT
Act, it cannot be said that Parliament has inadvertently overlooked an eventuality.
In fact, quite the opposite could be said with some force, relying on the definition
of payment claim, how a payment dispute arises, the list of prohibited provisions
omitting repeat claim provisions, the absence of regulatory proscription of those
provisions, and the Second Reading Speech. Rather than inadvertence, the
omission of prohibiting repeat claims appears deliberate.
Those three conditions quoted above are predicated on the basis that the
purpose of the NT Act would be frustrated without additional words. Neither can
that be said in this case. The purpose of the NT Act is to provide a summary
dispute resolution process that facilitates the rapid resolution of payment disputes
and to ensure a contractor’s cash flow.190
In Alcan Gove Development Pty Ltd v
Thiess Pty Ltd [2008] NTSC 12, after referring with apparent approval to
Southwood J’s statement of the general scheme of the Act, Angel J said:191
The object of an adjudication of a payment dispute is to determine the dispute fairly
and as rapidly, informally and inexpensively as possible: s 26. This is a fast track
progress payment dispute resolution mechanism which contemplates a minimum of
court involvement.
Southwood J’s remarks in TransAustralian Construction192
quoted above are
also to be remembered, that the object of the Act is to be achieved by facilitating
timely payments between the parties to construction contracts, providing for the
rapid resolution of payment disputes arising under construction contracts, and
providing mechanisms for the rapid recovery of payments under construction
contracts.193
It could not be said that permitting adjudication of disputes over repeat
claims authorised by the contract would frustrate that purpose. In fact, it would
fulfil that purpose to a greater extent than denying parties access to adjudication
where they had agreed that each other could deliver repeat claims. As it now
stands, even though parties agree they can redeliver unpaid claims, they cannot
have those disputes adjudicated – their only avenue is litigation, thus frustrating
the purposes of rapid, informal and inexpensive resolutions of disputes with a
minimum of court involvement.
The Parliaments enacting the eastern legislation obviously did not consider it
would defeat the purpose of their Acts to permit amounts being the subject of
more than one claim. Had they done so, they would not have expressly permitted
repeat claims. Without further analysis, it is safe to assert that the purpose of the
eastern Acts is fundamentally, perhaps exactly, the same as the purpose of the NT
Act.194
Time limits and processes are different under the eastern legislation, but
190
Boutique Venues Pty Ltd v JACG Pty Ltd [2007] NTSC 5 at [16], [18] (Southwood J).
191
Alcan Gove Development Pty Ltd v Thiess Pty Ltd [2008] NTSC 12 at [19].
192
193
See also the comments of Beech J to similar effect in O’Donnell Griffın Pty Ltd v John Holland
Pty Ltd (2008) 36 WAR 479 at [37]-[40].
194
If there is any doubt, see the objects of the Acts set out in NSW Act, s 3; Vic Act, s 3; Qld Act, s 7;
and, in Singapore, the decision of Prakash J in SEF Construction Pte Ltd v Skoy Connected Pte Ltd
[2009] SGHC 257 at [15], [51], [58], there being no statement of objects in the Singapore Act.
(2010) 1 NTLJ 165 203

those differences do not affect the essential purpose, and do not mean that
allowing repeat claims under the western legislation would defeat their purpose
any more than it frustrates the purpose of the eastern Acts.
Thus the crucial conditions for reading words into an Act have not been
satisfied here, where the effect of the court’s decision is to import a serious
prohibition not expressed in the Act.
Error as to more than one payment claim is jurisdictional
The Court of Appeal in Mac-Attack took the view that the question of whether
more than one payment claim was permitted for the same work was
jurisdictional. Mildren J said:195
Plainly, the question of whether or not a second payment claim for the same or
substantially the same claim is a matter of law going to the adjudicator’s jurisdiction.
Presumably his Honour meant whether the second payment claim was
permitted under the Act rather than under the contract. A misinterpretation of the
contract would generally not be jurisdictional, unless it went to whether the
contract was a construction contract within the definition of the Act.196
Southwood J said that the adjudicator’s ruling that the payment claim was
valid involved misinterpretations of the Act,197
that the application was not
served within time as a result of which the criterion in s 33(1)(a)(ii) (that the
application be served within time and containing the correct information) was not
satisfied and the adjudicator “lacked the jurisdiction to determine the payment
dispute”.198
All of this flowed from the adjudicator ruling that further claims
could be made including previous unpaid claims. His Honour did not state how
an error as to the existence of a payment claim (and consequently the time for
making application) was jurisdictional in addition to being a misinterpretation of
the Act.
The essence of the adjudicator’s ruling was that a valid payment claim
existed. His reason for that ruling was that the contract did not prohibit further
payment claims for previously claimed amounts (and, although he did not
consider it, that the Act permitted such claims). But his actual disputed ruling,
from which the time for making application flowed, was that there was a valid
payment claim. This is the matter which the Court of Appeal held to be
jurisdictional. This is contrary to authority in NSW and Singapore.
Eastern courts199
have consistently held that whether a claim is a payment
195
196
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [53] (Hodgson JA); SEF Construction Pte
Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 at [45]; Minister for Commerce v Contrax Plumbing
(NSW) Pty Ltd [2005] NSWCA 142 at [49]; Transgrid v Siemens Ltd (2004) 61 NSWLR 521
at [33]-[34]; Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63
NSWLR 385 at [46]; Plaza West Pty Ltd v Simons Earthworks (NSW) Pty Ltd [2008] NSWCA 279
at [27]-[28]; Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [71].
197
198
199
Using the same descriptor as for the legislation.
Ford
(2010) 1 NTLJ 165204

claim is a matter for the adjudicator. Prakash J in SEF Construction said:200
Similarly, although the SOP Act requires a payment claim to be served, whether or
not the document purporting to be a payment claim which has been served by a
claimant is actually a payment claim is an issue for the adjudicator and not the court.
In this respect, I agree entirely with Hodgson JA’s reasoning in Brodyn:
… If there is a document served by a claimant on a respondent that purports to
be a payment claim under the Act, questions as to whether the document
complies in all respects with the requirements of the Act are generally, in my
opinion, for the adjudicator to decide. Many of these questions can involve
doubtful questions of fact and law; and as I have indicated earlier, in my opinion
the legislature has manifested an intention that the existence of a determination
should not turn on answers to questions of this kind. However, I do not need to
express a final view on this.
In Perform, Giles JA, McColl and Young JJA agreeing, said:201
Whether a payment claim identifies the construction work or related goods and
services to which the payment relates, as required by s 13(2) of the Act, is generally
a matter for the adjudicator to determine: Coordinated Construction Co Pty Ltd v
Climatech (Canberra) Pty Ltd at [26] per Hodgson JA, [43]-[46], [51] per Basten JA.
Section 13(2) requires also that a payment claim indicate the claimed amount, and
more generally in Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in
liq) [2005] NSWCA 409; (2005) 64 NSWLR 462 at [76] Ipp JA said that the merits
of a claim including whether the claim complies with s 13(2) “is a matter for
adjudication under s 17”. In Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2006]
NSWCA 238; (2006) 67 NSWLR 9 Basten JA said at [71], referring to this
observation –
But the merit (or lack of merit) of a claim is, as Ipp JA expressly accepted, a
matter for determination by the adjudicator. Similarly, his Honour accepted that
the express elements of a valid claim set out in s 13(2) are matters for the
adjudicator. As suggested in Coordinated Construction Co v Climatech
(Canberra) Pty Ltd (at 380 [43]-[46]), (a passage cited without disagreement by
Hodgson JA in Nepean Engineering (at 473 [32]-[34])), determination of the
existence of essential preconditions to a valid claim are matters for the
adjudicator, not for objective determination by a court.
… In Downer Construction (Australia) Pty Ltd v Energy Australia I held, referring to
these cases and with the agreement of Santow and Tobias JJA, that determination of
the scope and nature of the payment claim was similarly a matter for the adjudicator.
Applying that reasoning to the validity of a payment schedule, his Honour
said:202
There is no reason to regard a correct view of what a payment schedule indicates as
more basic and essential to a valid determination than an adjudicator’s view of what
a payment claim identifies or indicates, or whether a submission has been duly made.
200
SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 at [46], citing Brodyn Pty
Ltd v Davenport (2004) 61 NSWLR 421 at [66].
201
Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [64], [66].
202
Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [67].
(2010) 1 NTLJ 165 205

This accords with the reasoning of Mildren J in Independent Fire
Sprinklers203
where his Honour held compliance with time limits to be
non-jurisdictional and non-essential, applying Parisienne Basket Shoes Pty Ltd v
Whyte (1938) 59 CLR 369 and Project Blue Sky Inc v Australian Broadcasting
Authority (1998) 194 CLR 355, in the latter of which McHugh, Gummow, Kirby
and Hayne JJ said:204
Traditionally, the courts have distinguished between acts done in breach of an
essential preliminary to the exercise of a statutory power or authority and acts done in
breach of a procedural condition for the exercise of a statutory power or authority.
Cases falling within the ﬁrst category are regarded as going to the jurisdiction of the
person or body exercising the power or authority.
His Honour expressly rejected a submission that “[i]f there was in fact no
claim served within 90 days as required by the Act, the determination is void”,205
which rejection goes to both the existence of a claim and the time for making an
application within 90 days thereafter.
It is contrary, however, to Southwood J’s reasons in TransAustralian
Construction where, after referring to the “central importance of valid payment
claim”,206
his Honour said:207
That does not mean that an adjudicator is free to get the question about whether a
payment claim exists wrong. Whether there is a payment claim is a threshold question
which an adjudicator has the jurisdiction to determine, but if he makes an erroneous
decision in relation to that threshold question, then he steps outside his jurisdiction
and any subsequent purported determination is a nullity and is void.
The weight of authority favours treating payment claims, their existence and
validity, as non-jurisdictional and non-essential. This is unaltered whether
considered against the requirements of the NT Act or the relevant contract.208
There is no material difference between the eastern and western Acts to render the
eastern authorities inapplicable to WA and the NT. In fact, since the validity of a
payment claim under the western legislation is determined primarily by reference
to the contract, and under the eastern Acts by reference to the Acts, the eastern
reasoning should apply a fortiori to the western Acts since errors regarding
payment claims under them will mainly be in interpreting the contract rather than
the relevant Act.
If the existence of a valid payment claim is not jurisdictional, an error in
interpreting the NT Act as to what constitutes a valid payment claim can be no
more jurisdictional. And if an adjudicator errs in ﬁnding that a payment claim
203
Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [39]-[48].
204
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [92].
205
Independent Fire Sprinklers (NT) Pty Ltd v Sunbuild Pty Ltd (2008) 24 NTLR 15 at [47]-[48].
206
207
208
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [53] (Hodgson JA); SEF Construction Pte
Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 at [45]; Minister for Commerce v Contrax Plumbing
(NSW) Pty Ltd [2005] NSWCA 142 at [49]; Transgrid v Siemens Ltd (2004) 61 NSWLR 521
at [33]-[34]; Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63
NSWLR 385 at [46]; Plaza West Pty Ltd v Simons Earthworks (NSW) Pty Ltd [2008] NSWCA 279
at [27]-[28]; Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [71].
Ford
(2010) 1 NTLJ 165206

exists as a result of misinterpreting the Act, he or she does not give himself or
herself jurisdiction by that misinterpretation, because payment claims do not go
to jurisdiction.
The appellant in Mac-Attack avoided this inconvenience by successfully
arguing that it was the adjudicator’s state of satisfaction which was the essential
precondition, as opposed to the objective existence of a payment claim. If the
state of satisfaction was reached as a result of misconstruing the NT Act, then the
requisite state of satisfaction would not be reached.209
However, as we have seen,
that principle applies where the statute expressly requires a state of satisfaction,
or opinion, or similar to be held.
CONCLUSION
Payments are now less secure as a result of the decision since, even where a
contract expressly allows, amounts unpaid from earlier claims cannot be included
in later claims, or be the subject of an adjudication application if the ﬁrst claim is
out of time.
The decision also opens the way for other provisions to be implied into the
NT Act which, either alone or by the effect of s 10, defeat the parties’ agreement
and their ability to make claims and applications.
It is respectfully submitted that Kelly J was correct in holding that it is a
matter for the parties by their contract to decide whether unpaid amounts may be
claimed in successive payment claims and thereby give rise to adjudicable
payment disputes. It is also suggested that the Supreme Court may leave
questions of compliance with s 33(1)(a) to the Local Court, including
determinations that time limits have or have not been satisﬁed.
209
Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229 at [47]
(Basten JA); Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [70].
(2010) 1 NTLJ 165 207

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