Keeping Busy

Those who visit these pages from time to time might have noticed that it has been a little while since my last post, and perhaps guess that this is a symptom of idleness.

In fact, the contrary is true. Since getting back from Europe and the United States, I have had far too little time for sidelines. In moving to the beautiful Myponga Beach, I had in mind that these days I go to the airport rather more often than I go to the law courts in Adelaide, and so it is been continuing to prove: I have been in Sydney on dispute avoidance board business and in Darwin on adjudication determination challenge business.

I did rather think that I might have been able to set a bit of precedent in the Northern Territory courts, in terms of bringing the Northern Territory into line with the rest of the country, and in particular New South Wales, on the topic of what introductory relief should be granted after an adjudication challenge has been launched, but before it can be heard by the court. In the Northern Territory, the typical practice has been to refuse interlocutory relief in those circumstances notwithstanding that the practising New South Wales has been to grant interlocutory relief conditionally upon payment into court or security being given for the full amount of the determination.

It is not hard to see the logic behind what has been described as the “long string of first instance decisions which establishes that usual practice” in New South Wales.[1] Assuming that the party mounting the challenge can establish at least a prima facie case (last week, in the Supreme Court of the Northern Territory, we were able to do this on the basis of the outline alone; the Chief Justice did not even require to hear oral argument on the point) the point really comes down to the balance of convenience. And typically, this balance is essentially a balance between a couple of weeks and a couple of years. If interlocutory relief is granted and the challenging party is unsuccessful on the judicial review, then the adjudication applicant is kept out of his money for a couple of weeks or so (assuming, of course, but the court will hear and deliver its decision on the judicial review rapidly, it is usually the case). Conversely, if the interlocutory relief is not granted, and the challenging party is successful on the judicial review, then there is no very obvious way in which the challenging party can get back the cash that it has just paid out pursuant to the determination which he has subsequently shown to be void. Depending on the state of the project, it might be possible to recoup the whole or part of that cash by withholding subsequent payments that would otherwise fall due to the adjudication applicant, but if (as often the case) the adjudication comes relatively late in the project, then it may well be necessary for the challenging party to launch an arbitration, or to bring full-scale court proceedings, in order to get that cash back. That may well take a couple of years or so, or often, somewhat more. Not only is the challenging party kept out of his money for this relatively lengthy period, but it is notoriously that, even if entirely successful, the challenging party will not be able to recoup the whole of its legal cost, and practically none of its commercial cost, as its resources are tied up in the lengthy arbitration or litigation process.

On the day of the application for interlocutory relief, the Chief Justice of the Northern Territory gave some informal indications during argument that he could see the merit in the New South Wales approach, but there is not going to be any authority on the point this time around, because the defendant could see the way that the wind was blowing, and we got the relief that we were looking for by consent.

The application for judicial review is indeed going to be heard promptly – next week in fact. One of several issues which the court is going to be addressed on is whether to also endorse another principle recently established in New South Wales, namely that adjudication determinations are amenable of challenge on the basis of error of law, whether jurisdictional or not, an adjudication determination is liable to be quashed if infected by error of law.[2]

I have been suggesting for a long time now that this might well be the proper conclusion to be drawn from Chase Oyster Bar, and the decision reflects the continuing trend that the courts in Australia are increasingly prepared to interfere in the adjudication process, that in turn reflecting – it seems to me – a sense that the adjudication process on the East Coast model is not working nearly so well as, for example, the adjudication process in the UK, where it is still remarkably difficult to overturn the adjudicator’s decision.

Speaking of the UK, I’ve also been coordinating the various Australian comments on the UK Society of Construction Law’s consultation draft of the 2nd edition of the Delay and Disruption Protocol. It is interesting that that protocol has had a significant impact all around the world. The 2nd edition is not hugely different from the first: a measured development rather than a radical reform.

Less confidence can be expressed about the Consultation Paper recently issued by the Government of South Australia on proposed reforms of the adjudication process in South Australia. Some of the proposed changes, and in particular following Queensland’s lead in disempowering the for-profit Adjudication Nominating Authorities, and abandoning the “one size fits all” approach to adjudication timescales, are eminently sensible. Some of the other ideas canvassed, such as introducing a requirement for statutory declarations of payments of subcontractors, are much less wise. I continue to chair the legislative reform subcommittee of the Society of Construction Law Australia, and we are continuing to press for a national approach to adjudication. It really is absurd that there is a different regime in every single state and territory of Australia. Then again, it is hard to find much logic in the entirely different statutory regimes which apply in other respects affecting construction, such as the need for licensing, statutory liability for defective work et cetera. I suppose the origin of all of this is a historical one. Australia is a federation of different states, formed at a time when it would have taken many days for news or people to travel from one capital city to another. Gradually, federalism is creeping into Australia, as part of a trend one sees time and time again around the world.

But not in the UK, course, which has just voted for Brexit.  It is a topic which excites vigorous passions in some people. Whilst I was in the UK, I had lunch with several of my old friends from other law firms, and as we all sat down I suggested that we should all declare at the outset whether we were

A.            Passionate Remainians,

B             Passionate Brexiteers,

C             Of the view that it will make much less difference either way than proponents of either A or B would have you believe.

We were all C.

Interestingly, the bookies were giving 3 to 1 odds on a remain vote, but I thought it was marginally more likely that the Brexiteers would win and so I put $100 on Brexit, and so have won the value of 2 or 3 bottles of decent whisky. Unhappily, I am currently on a diet to lose some weight, so tucking into decent whisky will have to wait for a while!


[1] Williams v Concreting Services

[2013] NSWSC 85 14 February 2013 per McDougall J

[7]           There is a long string of first instance decisions which establishes that usual practice. Some of them are decisions of mine. I do not feel persuaded that I should depart from the principle established by those decisions…

[10]         The general practice is, as I have said, that someone in the position of the first defendant should be prevented from exercising those rights only if it is given a substantial degree of satisfaction in return. Traditionally, that satisfaction has been payment into court of the adjudicated amount, or provision of a guarantee in an acceptable form in place of payment into court.

[19]         I will therefore grant injunctive relief on condition, among other things, that the sum of $110,000 be secured either by payment into court or by provision to the court of a guarantee in such form as the Registrar may accept.


[2] Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770 .

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