Security of Payments Commercial CPD Seminar. Wednesday 11 April 2018 Associate Professor Katy Barnett Melbourne Law School

Transcription

1 Security of Payments Commercial CPD Seminar Wednesday 11 April 2018 Associate Professor Katy Barnett Melbourne Law School

2 Probuild and Victorian Law Judicial review in the nature of certiorari is available for jurisdictional error: see eg, SSC Plenty Road v Construction Engineering (Aust) [2015] VSC 631 and Krongold Constructions (Aust) v SR & RS Wales [2016] VSC 94 an adjudicator must demonstrate the process of assessment of the value of the claim and not merely adopt the amount claimed by the claimant the latter will constitute jurisdictional error which is reviewable. But there is also a line of cases expressly say that judicial review in the nature of certiorari is available for error on the face of the record (i.e. non jurisdictional error). A few central cases: Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor [2009] VSC 156, (2009) 26 VR 112 Grocon Constructors v Planit Cocciardi Joint Venture (No. 2) [2009] VSC 426 Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2015] VSC 233 Two reasons for this, per Vickery J in the above cases: The Victorian Act has an express privative clause, s 25R(5)(a)(ii) of the SOP Act, which provides that once a determination has been entered as a judgment debt it cannot be set aside for nonjurisdictional error (see Amasya on this). It suggests that if the legislature had wanted a broader exclusion of non jurisdictional error it would have said so explicitly. Moreover, s 85(5) of the Victorian Constitution says that an Act will not limit the jurisdiction of the VSC unless a statement is made in legislation in stipulated terms. A s 85 statement was only made in relation to s 25R and s 46 of the Vic SOP Act, and not other parts of the Act.

3 Can the Victorian cases survive Probuild? Probuild suggests that intention must be read looking at the Act as a whole. The features of the NSW Act which led the HCA to decide that non jurisdictional error was not subject to judicial review are also present in the Vic SOP Act (including short timelines, informality etc). Prima facie, it therefore seems that the Victorian authority is wrong. However, Vickery J rightly observes that s 85 of the Victorian Constitution requires an express statement where an Act derogates from the VSC s jurisdiction. There is not an express statement in the Victorian SOP Act. Moreover s 25R(5)(a)(ii) of the Act only covers judgment debts. What happens to cases like Ian Street Developer Pty Ltd v Arrow International Pty Ltd [2018] VSC 14 and PHHH Investments No. 2 Pty Ltd [2018] VSC 15? In both, adjudication out of time was held by Riordan J to be a non jurisdictional error (i.e. adjudications still valid). Obviously such adjudications would not be subject to judicial review in NSW in light of Probuild would the situation be different in Victoria? Both Ian Street and PHHH are subject to appeal. It could be argued that the purposes of the Act are stultified by the Victorian Constitutional requirement. On the other hand, the right to apply for relief for error on the face of the record has been interpreted very narrowly, so it may not matter (see Grocon must be no probative evidence supporting the adjudication for review to be allowed). Toby Shnookal and Matthew Bell have both noted that in the end, the Victorian position is not so different from the other States.

4 Can the Victorian cases survive Probuild? (continued) However, note Milburn Lake Pty Ltd v Andritz Pty Ltd [2016] VSC 3 (Forrest J), where an injunction restraining a claimant under the Act from entering judgment was granted (subject to paying moneys into court) in order to permit the other party to seek to set aside the adjudication on the basis of non jurisdictional error. Edelman J s observation at [105] of Probuild suggests that this case is now wrong Parliament cannot have intended to create a race to court. Even accepting the HCA s distinction between reviewable jurisdictional errors and non reviewable non jurisdictional errors, there still remains a question of how strict courts should be on adjudicators for the purposes of jurisdictional error: SSC Plenty Road v Construction Engineering (Aust) [2015] VSC 631 and Krongold Constructions (Aust) v SR & RS Wales [2016] VSC 94

5 Final thoughts on Probuild Does Probuild further the purposes of the SOP legislation? Yes, it sends a clear message that parties cannot delay payment by raising non jurisdictional errors. I think at the least, Milburn Lake Pty Ltd v Andritz Pty Ltd [2016] VSC 3 must now be wrong. As Matthew Bell has observed, there has always been a concern to strike an appropriate balance between speed and justice with SOP legislation. The HCA balance has come down in favour of speed ( pay now, argue later ) What about the Victorian Act? How will Probuild affect it? Should Victorian courts tend more in the direction of speed rather than individual justice? Should the Victorian Act now include an express provision limiting review for nonjurisdictional error which references s 85 of the Victorian Constitution? More broadly: is the SOP legislation working? Yes. It appears to be working (interested in your thoughts, however). Can SOP legislation be improved? Hot topic! Under review by the Commonwealth government John Murray s review expected soon. Key issues include: harmonisation (East Coast versus West Coast), coherent and readily understandable limits on the kinds of claims brought (cf ss 10, 10A and 10B of Victorian SOP Act), better guidance on when contractual dispute resolution trumps adjudication, enforcement of judgment debts, status of privative clauses excluding review.