It has long been said that legislation should be interpreted according to the intent of Parliament.[1] Let us look at a particular example of how that works out in practice. Let us look at section 32(1)(b) of the Building and Construction Industry Security of Payment Act 1999 (NSW). This was, of course, passed by the Parliament of New South Wales, and then by other State Parliaments in the same form, including section 32 of the South Australian Act and section 38 of the ACT Act.
It provides that nothing in the procedural part of the Act (adjudication, and so forth) affects any right that a party has under the substantive part of the Act (the right to progress payments). At first blush, it is not entirely obvious what that means. In the ACT Court of Appeal in Harlech[2], it was thought, bizarrely, that this meant that a right to a progress payment is not affected by previous adjudication. That is not what the words say at all, and I thought it might be interesting to examine this a bit in terms of intention.
I do not have any grandmothers; they both died a long time ago. But if I did, I would be comfortable betting their lives that not a single one of the parliamentarians sitting in South Australia or in the ACT in 2009 (when their Acts were passed) had the faintest idea what the effect of this provision was. Insofar as there was any intellectual engagement at all, it was to the effect that the New South Wales Act, which had been in force for a decade, was proving pretty effective, and they had better get on with copying it.
So what about the parliamentarians in New South Wales in 1999? Again, it is extremely unlikely that there was any intellectual engagement by any of them as to what section 32(1)(b) means. And so the formula – trying to discern the intention of Parliament – is hopeless. It has to proceed on the fiction of a presumed intent, since in the absence of any intellectual engagement by Parliament, there cannot have been any actual intent of Parliament. And presumed intent is always a bit dodgy in a case like this, where the presumed intent is assessed by judges with little or no expertise in the area of interim resolution of construction disputes, and without the slightest regard to what was really the intent of the people who put the legislation together in the first place.
And so I thought it would be interesting to test this. In my post last week on this topic, I put forward that the real intent of this provision is not at all what the ACT Court of Appeal thought in Harlech. Rather, the intent was simply to make clear that the procedures provided for in this legislation – in particular adjudication – are not exhaustive of the right to a statutory progress payment. And I raised the question with Philip Davenport, who was the lawyer engaged by the NSW Department of Public Works in 1999 to prepare a scheme for rapid adjudication. I asked him:
Not strictly relevant from a legal point of view, of course, but as a matter of curiosity, is my guess right about the actual intention behind section 32(1(b) of the SoP legislation?
He replied:
I agree with your interpretation of s 32(1)(b). No well advised person would sue in court rather than use the much more convenient process under Part 3 to recover the progress payment. Nevertheless, it would be possible to sue in court for the progress payment to which a claimant is entitled under Part 2…
I think that the purpose to the section is to show that the right to a progress payment under Part 2 is not dependent upon the claimant invoking Part 3.
So, bearing in mind that Philip Davenport was the original architect of the security of payment scheme in Australia and thus well-positioned to say what the original intent of it was, it seems pretty clear that the ACT Court of Appeal was plumb wrong in Harlech if what it was trying to do was understand the actual intention of this section. Thus, likewise, the South Australian Court of Appeal in Goyder.[3]
This is not to suggest, of course, that the courts are going, any time soon, to make enquiries from the drafters of legislation as to what they meant. They will stick with their formula.
But it is an interesting example of where the courts go wrong. In this case with some markedly unwelcome consequences.[4]
[1] In Amalgamated Society of Engineers v Adelaide Steamship (1920) 28 CLR 129 at 161, the High Court said:
The fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded according to the intent of the Parliament that made it…
[2] Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd (2022) 18 ACTLR 245; [2022] ACTCA 42. Per Kennett J:
35 Importantly for present purposes, s 38(1)(b) provides that nothing in Part 4 (which includes the provisions for adjudication) affects any rights a person may have under Part 3 (which is where s 10 is located). It thus has the effect that an adjudication decision does not affect any right that a party may have to a progress payment under the SOP Act. In other words, a right to a progress payment said to arise out of a contract (which is necessarily the subject matter of any adjudication under the SOP Act) is not affected by a previous adjudication. Read in this way, s 38(1)(b) leaves no room for any issue estoppel to arise at common law, in an adjudication, in respect of issues decided in a prior adjudication.
And Lee J:
103 First, Harlech submitted that an adjudicator’s decision is “final” because it determines the statutory right to a progress payment under s 10. As would no doubt be already apparent, this submission, at this level of generality, is unsound because s 38(1)(b) provides that nothing in Part 4 of the Act (titled “Procedure for recovering progress payment” and encompassing ss 15–39) affects any right that a party to a construction contract “may have under Part 3 (Right to progress payments) in relation to the contract”. Furthermore, s 38(2) states that “[n]othing done under or for the purposes of this Part affects any civil proceedings arising under a construction contract, whether under this Part or otherwise”. Read in context, the phrase “civil proceedings arising under a construction contract” is broad enough to encompass civil proceedings concerning a claimant’s right to a progress payment.
[3] Goyder Wind Farm 1 Pty Ltd v GE Renewable Energy Australia Pty Ltd & Ors [2025] SASCA 39.
[4] For the reasons identified at https://feconslaw.com/2025/05/10/anshun-in-sop-in-the-high-court/