The form of the proposed legislation is available at http://www.cidb.gov.my/v6/files/ann/CIPAABill_English1.pdf. It is very much at the evaluative end of the spectrum, thus not at all following Singapore, which followed the default approach of the Australian East Coast Model.

It is to be hoped that IAMA will shortly be joined by the Joint Adjudicator Nominating Authority (JANA) which, after a somewhat long gestation period, is to be the vehicle for the joint venture by the Law Society of South Australia and the South Australian Bar Association, which will shortly be applying for ANA status.  The JANA panel of Adjudicators will consist of experienced construction lawyers – both solicitors and barristers – on the basis that where the parties have a large, legally complex dispute, they may well wish to have the dispute adjudicated by a construction lawyer and thereby hopefully reduce the risk of a decision which is legally flawed, and susceptible of challenge in Courts.  In anticipation of this, the joint venture has already run its accreditation course.  FEG Partners Robert Fenwick Elliott, Jeanie Elliott and Mardi Conduit are among those who successfully completed that course.

Date: Wednesday, 6 June 2012
Time: 9.00am to 1.15pm
Venue: InterContinental Adelaide, North Terrace, Adelaide

Details are at http://www.legalwiseseminars.com.au/sa-building-construction-law

The Newsletter includes (or will soon include) details of the survey on construction adjudication.  All those who have been involved in security of payment adjudications around Australia, whether as claimant or respondent, are encouraged to fill one in – it will only take a few moments – and that will help in our efforts to get this now somewhat troubled legislation back on track.

Update

The copy is now going to go into the SoCLA Conference Edition of the Newsletter. For those who cannot bear to wait; the text is as follows:

Australian Legislation Reform Sub Committee

 When this Sub Committee was formed, it was an easy decision that the first and most important area for us to look at should be the Security of Payment Legislation.  It seems to be the obvious and universal view that the legislation should be either federalised or at least harmonised across all of the States and Territories.  Much more difficult is the question of which of the models should be adopted, and how unity should be achieved.

 Robert Fenwick Elliott has recently taken over the Chairmanship of the Sub Committee from Peter Chau, and Simon Holding, who is shortly to graduate as a lawyer after a career in the Construction Industry, has been enlisted to gather data, so that a more objective and informed decisions may be made by Government.  In particular, Simon is sending out large numbers of short form questionnaires to people or organisations who have been involved in adjudication, either as claimants or respondents, in order to gauge how well the parties themselves perceive the various models as working, in terms of effectiveness, fairness, and in terms of the effect that that process has had on their commercial relationship.

 This short form questionnaire, and indeed the longer form which is designed for advisors and adjudicators, can be down loaded from the link on www.scl.org.au/australian-legislation-reform, and it would be helpful if members in all States and Territories would encourage their clients who have been involved in adjudication to download and submit this short form questionnaire (and also of course to complete the longer form questionnaire themselves, if they have not already done so).

 Getting this information together is a really important task, and, if we can collect a sufficient statistical sample, should provide a solid basis for a review of the system.  It is hard not to notice that the Courts willingness to interfere in the process has been accelerating in recent years, and if the procedure is going to deliver useful benefits to our clients over coming years, then an overhaul is surely going to be needed.

 Robert Fenwick Elliott

If anyone has been involved in an adjudication – in any State or Territory, either as claimant or respondent, and would be prepared to answer a short questionnaire, please download it from here. SoCLA want to know, in particular:

• Did it work?
• Was it fair?
• What effect did it have on your commercial relationship with the other party?

In other words, if a claimant puts in a Payment Claim, which is rejected the next day, has a payment dispute arisen (the early date construction) or does no dispute arise until the Payment Claim would be due for payment (the late date construction) or does a payment dispute arise both when the claim is disputed, and also when it falls due without being paid (the multiple trigger construction)?

The point is important because this date sets time running for the window within which an adjudication application must be made (90 days in the Northern Territory, but just 28 days in Western Australia).

In a string of cases (Blackadder v Mirvac [2009] WASAT133, South Coast Scaffolding v Hire Access [2012] WASAT5 and Fuel Tank v Decmil [2010] WASAT165 the Western Australian State Administrative Tribunal had found for the early date construction.  But in the recent decision of DCI v URC [2012] NTSC22 Barr J has found for the late date construction.  The facts in that case were that there was no doubt about their having been a payment dispute, that the Payment Claim had been disputed before the adjudication application was made, and that, at the time of the Adjudicator’s decision, the Payment Claim had fallen due.  Nevertheless, the Court found that, because the adjudication application was made a few days before the Payment Claim was due, there was a failure of an “essential precondition” such that the Adjudicator’s decision was void for jurisdictional error.

The decision will come as a surprise to many in the industry, who will naturally have assumed that when a Payment Claim is disputed, that amounts to a payment dispute.

It is by no means clear whether there will be any sufficient incentive on URC to appeal, since at the hearing of the original challenge, some time before the reserved judgment was delivered, the Judge dismissed DCI’s application for a stay, and told them to pay, which DCI did.  In any event, in light of the NSW decision in Cardinal v Hanave, URC made a further adjudication application, which is before the same Adjudicator.

The decision is likely to cause some difficulty, particularly in Western Australia.  Should claimants follow the Western Australia authorities in favour of the early date construction, ie make their adjudication applications within 28 days from when the Payment Claim is first disputed? Or should they wait until the money claimed is due, as decided in DCI v URC?  There are risks either way: if claimants take the first course, they run the risk of ending up in the Supreme Court and DCI v URC being applied to declare the whole process void.  If they take the latter course, they run the risk of being outside the 28 day window.

The DCI said that they wanted to run this as a test case, but the result appears to have had entirely the opposite effect, and it seems inevitable that the courts will have to return to this issue in Western Australia and/or the Northern Territory.

Robert Fenwick Elliott, instructed by Fenwick Elliott Grace, was counsel for URC.

Full case reference:  Northern Territory of Australia, acting through the Department of Construction and Infrastructure Construction Division v Urban & Rural Contracting Pty Ltd [2012] NTSC 22.  A copy of the Judgment is here.

The most recent Guide still has us up there at the top, with the firm “First Tier” in the firm category and Robert Fenwick Elliott (pictured below on the right) as “eminent” in the lawyer category:

The course runs from lunchtime this Thursday, 15th March, to Saturday lunchtime. The course presenters are Professor Rashda Ran from the bar in Sydney, Robert Fenwick Elliott and Philip Adams. The course, and the materials, should also be of use to practitioners who want an in depth guide on how adjudications under the new security of payment regime will operate.

Applications are being dealt with by Graham Jobling at the Law Society (tel 08 8410 5865)

Update

This course duly took place, and  a good field of leading counsel, junior counsel and senior solicitors all successfully took part.

For a recent decision by Robert Fenwick Elliott as adjudicator, see http://www.nt.gov.au/justice/policycoord/documents/construction/27_12_01.doc.