This case is by way of update on the case of Goyder v GE-Elecnor, which is of some importance to the application of the 3 principles of preclusion (res judicata, issue estoppel and Anshun) to security of payment in Australia. It is a case I know well, having acted as leading counsel at first instance in the Supreme Court of South Australia, and in the appeal, and now having prepared the application for leave to appeal to the High Court.
First, some background. Goyder is building a wind farm. It engaged a joint venture consisting of GE and Elecnor for the project. It should have started in March 2022, but there was a short delay at the beginning of the project, which held up access to the site. The contract was in a fairly typical form; the contractor was entitled to an extension of time in certain circumstances, and to delay costs in a more limited set of circumstances. The contractor claimed an extension of time of 118 days. There was the usual regime for notices and for the parties to meet to try to resolve things. That meeting was held in March 2023, but did not resolve things. The contractor eventually gave notice of arbitration in December 2023, claiming an extension of time of 118 days in delay costs of some $61 million for various categories of alleged cost. That arbitration continues to struggle on.
Meantime, conscious no doubt that these arbitrations take a while, the contractor made a payment claim in February 2024 under the Building and Construction Industry Security Of Payment Act 2009 (SA) including a claim for delay costs of some $15 million, being some of that $61 million. That claim led to an adjudication in which the contractor was partially successful. And then in April 2024, the contractor made a payment claim for some $26 million for another chunk that of those delay costs. These chunks mirrored almost exactly the categories of claim in the earlier notice of arbitration. That second payment claim also led to an adjudication in which, again, the contractor was partially successful. In July 2024, the contractor made a 3rd payment claim for some $21 million by way of delay costs, this time overlapping somewhat with its first claim. And then in December 2024, the contractor made a 4th payment claim for Delay costs, this time for some $15 million. That led to yet another adjudication determination, this time for zero.
All of these claims were based on the same alleged 118 days delay, the same contractual provision, the same set of contractual notices, and the same unsuccessful dispute resolution meeting back in March 2023. And so in July 2024, Goyder issued proceedings asserting that the 2nd and 3rd payment claims were contrary to the principles of preclusion, and thus invalidities. Those proceedings, reported as Goyder Wind Farm 1 Pty Ltd v GE Renewable Energy Australia Pty Ltd & Ors [2024] SASC 108, were one half successful; the 3rd of these payment claims was found to be invalid, because of its overlap with the first claim, but the 2nd was not quashed. Goyder appealed, and the Court of Appeal’s decision was handed down last month: Goyder Wind Farm 1 Pty Ltd v GE Renewable Energy Australia Pty Ltd & Ors [2025] SASCA 39 . To the surprise of many, the appeal was dismissed. This week, Goyder filed its application in the High Court for special leave to appeal.
The Three Principles of Preclusion
It is well settled that there are 3 doctrines principles of preclusion that applied in litigation in this area. (1) Res judicata (also known as “cause of action estoppel”) prevents the reopening of a cause of action which has already been decided. (2) Issue estoppel prevents the reopening of an issue of fact or law which was necessarily resolved in an earlier proceeding. (3) The Anshun principle (also known as “Anshun estoppel”, or “extended issue estoppel”) precludes the assertion of a claim that is so connected with the subject matter of an earlier claim as to make it unreasonable for that claim not to be made as part of that earlier claim. These principles are applied both as a matter of estoppel, and as a matter of abuse of process.[1] More on that distinction in a moment.
The issue in this case concerns the application of these principles in the context of security of payment. We all know, of course, the decisions of adjudicators are not binding on courts or arbitrators who eventually decide on the rights of the parties. They are not even relevant, save as a matter of cash flow. And so the 3 principles do not apply to preclude the parties revisiting in litigation or arbitration what has already been decided in adjudication. But do the principles apply in a more limited way, to preclude serial reagitation of claims at the security of payment stage? In other words, are there 2 stages, with these principles of finality applying separately in each stage? Hitherto, the answer has been “yes”, both as a matter of estoppel and as a matter of abuse of process.
In the case of res judicata, the principle is largely codified in what is section 24 in the South Australian version of the legislation. An adjudicator is bound to give the same value to construction work as a previous adjudicator who is valued that work, unless the value has changed. That first principle was not in issue in the appeal.
In the case of issue estoppel, the position was established by the majority decision in Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69: principles of issue estoppel apply to security of payment claims, both as a matter of estoppel and abuse of process. Until recently, nobody doubted this, and the decision has been followed many times. [2]
Similarly, the courts have indicated time and again that the Anshun principle also applies. There is an indication to that effect in Dualcorp itself:
[34] …It is a tenet that underpins the extension of principles of preclusion to some circumstances where the issues raised in the later proceeding could have been raised in an earlier proceeding[35].
[77] … principles of finality find reflection not only in doctrines of preclusion intended to protect the position of an individual (the doctrines of res judicata, issue estoppel, and so-called “Anshun estoppel“) but also…
And this was the ratio in the decision in Wiggins Island Coal Export Terminal Pty Ltd v Monadelphous [2016] QSC 96 (a SoP case)
[169] Accordingly, in my view, there is an extended or Anshun estoppel precluding the respondents from pursuing V0247 in the third adjudication application.
There are numerous other dicta at the same effect.[3] Again, the principle is available both as a matter of estoppel, and as a matter of abuse of process.
Harlech
But then, in Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd (2022) 18 ACTLR 245; [2022] ACTCA 42, the Court of Appeal in the ACT took a different view. It thought that estoppel was an “inapt label” to describe the principle in the context of security of payment. It came to this view on the shaky ground of section 32, and because that the concept of abuse of process was of “broad ambit” and thus suitable to capture the mischief prohibited by the Act.
The part of section 32 that does the “heavy lifting” is section 32(2). In the South Australian version of the Act, this provides:
(2) Nothing done under or for the purposes of this Part affects any civil proceedings arising under a construction contract, whether under this Part or otherwise, except as provided by subsection (3).
“This part” is Part 3 of the Act, which contains the procedures for the making of claims and adjudication. So that is all perfectly straightforward. An adjudication is something “done” here, and so the result of any adjudication does not affect any subsequent litigation or arbitration. Except to the extent of subsection 3, which provides – sensibly enough – that account must be taken of anything paid as a matter of cash flow, and if the result is that there has been an overpayment, that overpayment has to be paid back.
Section 32(1)(b) is less obvious; it provides:
(1) Subject to section 33, nothing in this Part affects any right that a party to a construction contract—
(a) …
(b) may have under Part 2 in respect of the contract; or
(c) …
The only “right” the parties have under Part 2 is the right to the statutory progress payments. Unless you count the prohibition on pay when paid clauses, which might perhaps be thought of as a right for a subcontractor not to be denied his payment merely because the head contractor has not been paid. So what does this mean? Unlike subsection 2, it does not talk about anything “done” under the Part 3 procedures. It is somewhat akin to a provision in court rules dealing with personal injury claims saying (hypothetical here) that “Nothing in those court rules affects any personal injury claims”. Probably, what the drafter was getting at was that the procedures provided for adjudication of the statutory right to progress payments were not exhaustive of the parties’ rights to those progress payments. In other words, claimants can, if they choose, seek to enforce those rights by other means, such as litigation or arbitration. I discuss such an avenue at paragraphs 10.46 to 10.50 of Volume I of my book Extra-Contractual Recoveries for Construction & Engineering Work, but as far as I am aware, there is no reported case of anybody ever making such a claim. When it comes to litigation or arbitration, the parties make their claims in terms of the contractual rights to payment, not the statutory right. Similarly, the effect of this provision is to clarify that nothing in the procedural part of the Act (Part 3) cuts across the right of subcontractors to be paid what is due to them regardless of any pay when paid clause.
Be that as it may, there appears to be nothing in section 32 which warrants claimants riding roughshod over the principles of preclusion as those principles have repeatedly been held to apply in the context of security of payment. And in some weird world in which section 32 does has that effect, why would it not have that effect in respect of abuse of process: nobody is suggesting that! And so the finding in Harlech that estoppel is not available in the context of security of payment appears, not only flies in the face of previous authority, but is bad in law. It is also thoroughly bad policy – we will get to that in just a moment.
The Court of Appeal Heads Off after Harlech
None of this was canvassed in the Court of Appeal. The principle being considered was not issue estoppel, but Anshun. Goyder’s position was that it was not necessary for the Court of Appeal to resolve the question as to whether the principle of issue estoppel is properly to be characterised as a matter of estoppel, or abuse, or both, but that the right answer to that question is “both”.
Be that as it may, and despite the lack of submissions or argument on the point, the Court of Appeal did weigh in on precisely this topic of categorisation, and again relying on section 32, followed Harlech in part in finding that there was no scope for issue estoppel – as a matter of estoppel – in the security of payment context. But the Court of Appeal did not follow Harlech as to the ambit of abuse of process. Instead of the “broad ambit” recognised in Harlech, it narrowed the ambit, at any rate in the context of Anshun, does something very narrow indeed. The Court of Appeal could not believe that the serial agitation of claims (in this case, 4 claims for delay costs arising out of the same alleged delay over a period of 10 months) was in any way contrary to the objective of the legislation of speedy and effective resolution of disputes on an interim basis. One might think that this case represents a “high watermark” case for abuse of process on Anshun grounds. Sometimes, in these cases, there is room for speculation as to whether the later claims could reasonably have been made in the first claim, but here there is no room for doubt, because all of these claims serially pursued under security of payment mechanism had already been fully formulated beforehand. Indeed, the notice of arbitration quantify them to the nearest cent and confidently asserted that they had been assessed by an independent expert.
So What?
You may be wondering where is the “so what?”. What is the wider significance of all of this for adjudication in Australia. Well, it is this. When things get to court, the categorisation issue is of little relevance. The court can do justice regardless of whether issue estoppel or Anshun is categorised as truly matters of estoppel, or matters of abuse of process, or both. It is all the much the same. But for an adjudicator, it is very different. Estoppel is a defence. So, when an adjudicator is presented with a claim which plainly offends against the principles of preclusion – for example where the claim seeks to re-agitate an issue which is already been determined in a previous adjudication – an adjudicator can properly reject that claim if issue estoppel is available. But if issue estoppel is not available, the adjudicator has to proceed, since an adjudicator has no power to declare that the proceeding before him is an abuse of process.[4] And so he or she has to make a determination. And might well come to a conclusion on that issue which is inconsistent with the conclusion in a previous adjudication. And then what happens? The respondent applies to have the second determination quashed on the basis that the second payment claim is an abuse of process. And the law remains that abuse of process is available to the courts (but not the adjudicator) to restrain the abuse, to declare the second payment claim an abuse and accordingly quash the second determination.
In other words, the absurd result of the Court of Appeal’s decision in this case is that adjudicators who do precisely what is required of them, in light of this decision, are regularly going to find their determinations quashed on the basis of abuse of process.
That cannot be good for the construction industry. It is bad for the reputation of perfectly sound adjudicators, is bound to lead to needless litigation, and it brings the whole security of payment process in to disrepute. Not just in South Australia, but across the country, because the legislation is essentially the same in every state in this regard.
Will the High Court fix this? Who knows? There are far more applications than they can sensibly deal with, and so it is in the lap of the Gods as to whether this application will make the cut.
But I think many adjudicators are going to be hoping that the High Court sorts this out.
[1] See eg Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28:
[22] Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first …res judicata… The second form of estoppel … “issue estoppel”… The third form of estoppel is now most often referred to as “Anshun estoppel”. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a “true estoppel” and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.
[2] Including Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd [2009] NSWSC 416 at [42], University of Sydney v Cadence Australia Pty Ltd [2009] NSWSC 635 at [5], Urban Traders v Paul Michael [2009] NSWSC 1072 at [26], Allpro Building Services v C & V Engineering Services [2009] NSWSC 1247 at [15], Watpac Constructions v Austin Corp [2010] NSWSC 168 at [90], John Holland Pty Ltd v Schneider Electric Buildings Australia Pty Ltd [2010] QSC 159 at [48], Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 at [210], Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355 (14 December 2010) at [27], Illawarra Retirement Trust v Denham Constructions Pty Ltd [2015] NSWSC 1173 (20 August 2015) at [87], Modscape Pty Ltd v Francis [2017] TASSC 55 (20 September 2017) at [4]-[5], Shape Australia Pty Ltd v The Nuance Group (Australia) Pty Ltd [2018] VSC 808 (21 December 2018) at [14], Salini-Impregilo SPA v Francis [2020] WASC 72 at [388], Ingeteam Australia Pty Ltd v Susan River Solar Pty Ltd [2024] QSC 30 at [98].
[3] Adding emphasis:
Watpac Constructions v Austin Corp [2010] NSWSC 168:
[107] It has been understood clearly for many years that the principles of issue estoppel apply not only to issues actually raised and necessarily decided but also to issues that could (and perhaps should) have been raised, but were not. If the decision of the majority in Anshun signalled some change of significance in the law (and I doubt that it did), that is something of which the legal profession has been aware for almost 30 years.
[128] … The question is whether it was reasonable not to raise the matter in earlier proceedings…
AE & E Australia Pty Ltd v Stowe Australia Pty Ltd [2010] QSC 135:
[32] It is sufficient to state the relevant principles that I intend to apply in determining this application:
(a) The concept of issue estoppel, insofar as it is applicable to determinations by adjudicators under the Act, includes the Anshun principle.[3]
VK Property Group Pty Ltd and Ors v A A D DESIGN PTY LTD and Anor [2011] QSC 54:
[19] …it is necessary to briefly consider issue estoppel in the context of the Act. Those principles are helpfully set out in AE & E Australia Pty Ltd v Stowe Australia Pty Ltd. Applegarth J, stated the principles thus:
“(a) The concept of issue estoppel, insofar as it is applicable to determination by adjudicators under the Act, includes the Anshun principle…
Machkevitch v Andrew Building Constructions [2012] NSWSC 546:
[56] Further, for the reasons that I give in Watpac Constructions v Austincorp [2010] NSWSC 168 at [123] to [129], decisions of adjudicators attract also the extended doctrine of issue estoppel frequently described as “Anshun” estoppel (Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589).
Ku-Ring-Gai Council v Ichor Constructions Pty Ltd [2014] NSWSC 1534:
[51] Unless Ichor is restrained from so proceeding, the Council will for the second time have to meet a claim that had it been better, or at least differently prepared could have been disposed of by the First Adjudicator.
Karam Group Pty Ltd ATF The Karam (No. 1) Family Trust v HCA Queensland & Ors [2023] QSC 245:
[34] Jackson J considered whether there is a form of estoppel in construction adjudication in Wiggins Island Coal Export Terminal Pty Ltd v Monadelphous Engineering Pty Ltd. After an analysis of Dualcorp, Caltex, and Sunshine Coast Regional Council, his Honour stated that: “any issue estoppel that arises under the [Act] is a unique species of estoppel. For brevity, I will call it ‘Dualcorp issue estoppel”’.
[35] His Honour then proceeded to determine whether Dualcorp issue estoppel applied to the facts of each variation and claim. His Honour declined to determine whether an abuse of process applied as:
“[175] The questions raised … are properly analysed in the frameworks of the Dualcorp issue estoppel or extended or Anshun estoppel, to the extent that they operate in this field of discourse.”
[36] The cases show the accepted position in Queensland is that Dualcorp issue estoppel applies in construction adjudication. I do not accept HCA’s submission that the Queensland authorities show considerable caution in the operation and application of Dualcorp issue estoppel.
[4] Adjudicators have repeatedly found that they do not have authority to declare an abuse of process (see eg VK Property at [15(a)]) and they are almost certainly right about that; see The University of Sydney v Cadence Australia Pty Limited & Anor [2009] NSWSC 635 at [59].