Durham v Adjudication Registrar (No. 1) [2016] QCAT 535
CITATION: Durham v Adjudication Registrar (No. 1) [2016]
QCAT 535
PARTIES: Helen Durham
(Applicant)
v
Adjudication Registrar
(Respondent)
APPLICATION NUMBER: GAR340-14, GAR108-15, OCR136-15,
OCR137-15, OCR138-15
MATTER TYPE: General administrative review
HEARING DATE: 4 May 2016
HEARD AT: Brisbane
DECISION OF: Justice Carmody
DELIVERED ON: 28 November 2016
DELIVERED AT: Brisbane
ORDERS MADE: IT IS THE DECISION OF THE TRIBUNAL
THAT:
1. MTT2 is confirmed to the extent that it
conforms to the terms of s 120 Building
and Construction Industry Payments
Act 2004 (Qld).
2. MTT1, the CPD Condition, the February
2015 General Conditions
2(f),(i),(j),(k),(m),(p),(q),(u) and (x) and
the June 2015 General Conditions
2(a)(i),(c),(d),(e),(f),(g),(h),(i),(k),(l) and
(m) are declared void.
3. The applicant is at liberty to file in the
tribunal two (2) copies and serve on the
respondent one (1) copy of any
submissions in support of her
application for costs, by:
4:00pm on 23 December 2016.
4. The respondent is at liberty to file in the
tribunal two (2) copies and serve on the
applicant one (1) copy of any
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submissions in response to the
application for costs, by:
4:00pm on 20 January 2017.
CATCHWORDS: STATUTES – ACTS OF PARLIAMENT –
STATUTORY POWERS AND DUTIES –
CONSTRUCTION – CONFERRAL AND
EXTENT OF POWER – where the applicant
applies for a review of the adjudication
registrar’s decision to impose conditions on her
registration as an adjudicator under the Building
and Construction Industry Payments Act 2004
(Qld) – where the registrar has the statutory
power to impose conditions he considers
appropriate to give effect to the Building and
Construction Industry Payments Act 2004 (Qld)
– where the registrar also has incidental powers
reasonably necessary for discharging his
responsibilities – where the conditions must
also be necessary to ensure an adjudicator’s
effective performance of their functions –
whether the decisions to impose conditions on
the applicant’s registration were ultra vires –
whether the reviewable decisions should be
confirmed, are void or are liable to be set aside
for invalidity
Acts Interpretation Act 1954 (Qld) s 20, 23, 32
Building and Construction Industry Security of
Payment Act 1999 (NSW)
Building and Construction Industry Payments
Act 2004 (Qld) s 7, 8, 21, 22, 23, 25, 25A, 25B,
26, 27, 28, 30, 31, 37, 38, 56, 57, 58, 59, 60, 62,
64, 65, 67, 70, 71, 74, 77, 79, 80, 81, 82, 93, 97,
102, 111
Judicial Review Act 1991 (Qld) Part 2, Part 5,
Schedule 1
Building and Construction Industry Payments
Regulation 2004 (Qld) Reg 2A, 3B; Schedules 1,
1A, 2
Queensland Building and Construction
Commission Act 1991 (Qld) Part 4A
Queensland Civil and Administrative Tribunal
Act 2009 (Qld) s 17, 19, 22, 24, 60
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3
Altys Multi-Services Pty Ltd v Grandview
Modular Building Services Pty Ltd [2008] QSC
26
Anthony Hordern & Sons Ltd v Amalgamated
Clothing & Allied Trades Union of Australia
(1932) 47 CLR 1
Brodyn Pty Ltd t/as Time Cost and Quality v
Davenport (2004) 61 NSWLR 421
Carbines v Powell (1925) 36 CLR 88
R v Connell, ex parte Hetton Bellbird Collieries
(No 2) (1944) 69 CLR 407
Grech v Bird (1936) 56 CLR 228
Intero Hospitality Projects Pty Ltd v Empire
Interior (Australia) Pty Ltd [2008] QCA 83
McKinnon v Secretary, Department of Treasury
(2006) 228 CLR 423
Minimax Firefighting Systems Pty Ltd v Bremore
Engineering (WA Pty Ltd) & Ors [2007] QSC 333
Minister for Immigration and Citizenship v Li
(2013) 249 CLR 332
Saraswati v R (1991) 172 CLR 1
Shanahan v Scott (1957) 96 CLR 245
R v Toohey ex parte Northern Land Council
(1981) 151 CLR 170
Water Conservation Commission v Browning
(1947) 74 CLR 492
APPEARANCES and REPRESENTATION:
APPLICANT/APPELLANT A Crossland of Counsel and H Durham
RESPONDENT S Moody of Counsel instructed by J Stroud for
the Adjudication Registrar
REASONS FOR DECISION
[2] This is an external review of the adjudication registrar’s own confirmation of
five decisions he made in 2015 imposing education, training, continuing
professional development and other more general conditions on the
applicant’s registration as an adjudicator under the Building and
Construction Industry Payments Act 2004 (Qld) (Payments Act).
[3] As a registered adjudicator, the applicant decides provisional liability for
progress payments payable under a construction contract. The registrar has
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adjudicator-related registration and referral functions under the Payments
Act.
[4] It is common ground that the five reviewable conditions will be void for
illegality unless they are reasonable and considered by the registrar to be
both appropriate to give effect to the Payments Act and necessary to ensure
an adjudicator’s effective performance of their functions.
The reviewable decisions
[5] Insofar as they apply to her, the applicant disputes the legality,
reasonableness, necessity and appropriateness of each of the registrar’s
decisions to impose the contested conditions, which are referred to in the
proceedings as:
General Conditions – the set of conditions imposed on the
registrations of adjudicators from time to time by the registrar,
usually upon registration and/or renewal of registration. These
have had numerous iterations; each replacing the immediately
preceding version. For example, the general conditions imposed
on the registration of some adjudicators in February 2015 (the
February General Conditions) were superseded by 14 general
conditions imposed on all registrations (the June 2015 General
Conditions) predominantly aimed at registry efficiency and
improving the adjudication process in practice.
For example, Condition 2(c) requires adjudicators to give a
physical address for service in Queensland. Condition 2(d)
requires adjudicators to accept the delivery of all adjudication
applications electronically via Objective Connect, or by courier.
Under condition 2(e), adjudicators must return certain forms after
receiving an Adjudication Referral Kit within one business day.
Pursuant to condition 2(f), adjudicators are to serve a notice of
acceptance on the claimant and respondent to an adjudication
application within one business day of receiving confirmation of
acceptance form from the registry.
The operation of conditions 2(b) and (c) of the February General
Conditions were stayed and one of the June General Conditions
was amended, with others withdrawn.
Mandatory Transitionary Training Conditions (MTT) – require
completion of approved training courses (MTT) under MTT1 or
MTT2.
i. MTT1 was imposed by the registrar on the registration of all
adjudicators around August 27 2014. At the same time,
adjudicators were also given a copy of two related
documents, being a guideline titled ‘Mandatory Transitionary
Training Condition Guideline’ (MTT Guideline) and an
Information Sheet titled ‘Mandatory Transitionary Training for
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Adjudicators’. MTT1 expressly incorporated the MTT
Guideline and required adjudicators to complete the course
as directed by the registrar and set out in the MTT Guideline.
When the registrar imposed MTT1, planned amendments to
the Payments Act were highly anticipated but had not yet
been passed.
Some adjudicators (including the applicant) did not complete
MTT1, and the registrar imposed MTT2 on them in 2015,
which extended the period within which to complete the MTT
within six months or so. This was intended by the registrar to
replace MTT1.
The operation of MTT1 was stayed by consent on 19
February 2015 under s 22(3) Queensland Civil and
Administrative Tribunal Act 2009 (Qld) (QCAT Act), but the
parties disagree about whether it was intended or agreed to
have permanent or temporary effect.
ii. MTT2 was imposed by the registrar on or about 3 June 2015
on the registration of those adjudicators who did not comply
with MTT1 (including the applicant) under s 120 Payments
Act after the applicant challenged MTT1. It stated that
adjudicators must “successfully complete the MTT Course as
prescribed by s 3B of the Payments Regulations” by 7
September 2015.
Despite some differences in the detail of the two conditions –
for example, that “100% attendance and participation” is
required in MTT1, while MTT2 is offered ‘by distance’ and
includes participation questions – the registrar contends that
they are virtually identical. Both were designed and
presented by the same person, covered the same material in
the same manner, and included identical pre-reading
material, slides and exam. Two days of recorded seminar
material from MTT1 forms the core of MTT2.
Between 6 May 2015 and the purported withdrawal of MTT1
on 2 June 2015 and its replacement with MTT2 on 3 June
2015, the registrar had regard to the 2015 AGR – including
whether an adjudicator had completed MTT and their test
scores – in making referral decisions.
The applicant, in fact, attended MTT2 on 9 October 2015.
The relevance to the review issues of the MTT course content
that the applicant completed was ruled on at a preliminary
hearing but revisited in final submissions. The applicant
contends that the tribunal cannot properly conduct these
proceedings without the content and delivery of the MTT
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course, because both rationally affect the condition’s
objective reasonableness, necessity and appropriateness of
the training conditions and, therefore, ignoring them would
amount to specific discretionary error.
The registrar, by contrast, argues that neither of the MTT
courses’ content nor method of delivery are relevant to the
validity of the disputed conditions, because the applicant was
not obliged to attend any particular course.
The training program envisaged by the registrar is mentioned
in the MTT Guidelines by reference to elemental subject
headings or coursework topics; not according to a detailed
description of precisely who would be providing exactly what
or how.
This review, limited to reviewing the legality and merits of the
registrar’s decision to impose and confirm the training
conditions, can be properly conducted without recourse to
specific course materials. They have no relevance to issues
the tribunal has jurisdiction to consider. Whether the course
the applicant was directed to (or did) attend met the
description of the registration conditions is outside the scope
of the inquiry.
CPD Condition – the “Continuing Professional Development
(CPD) Condition” imposed by the registrar upon the registration of
all adjudicators in May 2015 mandating successful completion of
certain requirements in accordance with the “Continuing
Professional Development for Adjudicators Guide” (CPD Guide).
CPD provides adjudicators with the opportunity to develop their
skills with a view to assisting adjudicator promotion from one grade
to the next. The CPD Guide (the latest version of which was issued
to adjudicators on or around 26 May 2015) requires adjudicators
to obtain a minimum of 10 CPD points in a given CPD year.
The effect of the CPD, MTT2 and the June General Conditions
were suspended until the tribunal reviewed them.
Agency Condition – the condition imposed by the registrar on the
registrations of all adjudicators in or around October 2014. On 22
October 2015, the tribunal ordered, with the parties’ consent, that
it be set aside and the registrar pay the applicant’s costs of the
review proceedings in respect of that decision.
[6] The registrar says he decided to issue the reviewable conditions to “capture
and clarify the new processes” introduced by amendments to the Payments
Act in 2014 and “ensure that each and every adjudicator understands and
effectively performs” his or her changed responsibilities in such a way as to
enable the Registry to effectively perform its enhanced role in the
adjudication process.
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[7] The applicant claims the registrar’s entire approach to the imposition of
conditions is fundamentally flawed. She denies that he has any power to
impose any of the reviewable conditions on the basis that they do not give
effect to the Payments Act and could not be considered necessary for
ensuring the effective performance of an adjudicator’s role.
[8] She argues the reviewable conditions are all ultra vires because the
registrar’s express or implied functions do not include the training or testing
of adjudicators, establishing and administering common performance
standards or a professional development regime, or quality assurance of
any aspect of adjudication practices or procedures, nor the regulation of
adjudication fees.
[9] The ultra vires doctrine requires all official action including imposing
registration conditions to be authorised by a regular law. As Aronson and
Groves note, there is no such thing as absolute or unfettered power.1
[10] Statutory powers and discretions bestowed on subordinate administrative
authorities are confined by the subject matter, intended purpose, policy
goals and practical reach of the enactment conferring them.2 A person
cannot confer power on him or herself by misconstruing the extent of their
authority to act.3
[11] The legality of an exercise of official power is determined by looking at the
enactment and its scope and object in conferring the discretion in question.
Every statutory discretion must be used consistently with its “internal logic”4
which defines its intended function and limits. Straying beyond the express
or implicit limits of statutory power by doing something more than it permits
or less than it demands nullifies the end result.
The tribunal’s role
[12] The tribunal derives its review jurisdiction jointly from s 97 Payments Act
and s 17 QCAT Act. It is not tasked with merely reviewing for errors of law,
but conducting a full review of the legality and overall merits of each
reviewable decision or condition. The correct and preferable decision
depends on the limits set by the Payments Act on the registrar’s power to
impose conditions on adjudicator registrations.
[13] In performing its role, the tribunal ‘stands in the shoes’ of the registrar and
decides the issues for itself as at the review date on the materials before it.
This is significant because when and on what a validity of a reviewable
decision is examined determines the nature of the remedial powers and
discretions available to the tribunal. Having regard to the nature of the
1 Mark Aronson & Matthew Groves, Judicial Review of Administrative Action (Thomson
Reuters, 5th ed, 2013) [3.30].
2 Water Conservation Commission v Browning (1947) 74 CLR 492, 505.
3 R v Connell, ex parte Hetton Bellbird Collieries (No 2) (1944) 69 CLR 407, 430.
4 Justice Robert French, ‘Administrative Law in Australia: Themes and Values’ in Matthew
Groves and HP Lee (eds), Australian Administrative Law – Fundamentals, Principles and
Doctrines (Cambridge University Press, 2007) 19.
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reviewable conditions, the source of power for making them and achieving
finally between the parties, I think their legality should be determined on the
basis of the past rather than the present circumstances; that is, when they
were made not now.
[14] The tribunal may confirm, or, if it reaches a different conclusion from the
registrar’s or considers there is a better way of exercising the discretion,
amend or substitute it any or all of the reviewable decisions and either make
substitute orders of its own or remit the matter back to the registrar for
reconsideration.5 However, as the questions for the tribunal are the same
as those the registrar faced, the answers he gave should not be overturned
or varied unless a different view is taken of the law or its application to the
facts or that there is a more preferable way of exercising the discretion to
impose registration conditions.
[15] Whatever the tribunal decides, it is taken to be the original decision. If a
belief or degree of satisfaction is required for exercising a discretion, it is
the tribunal’s, not the registrar’s, that counts and, subject to any contrary
order, takes effect retrospectively – that is, when the reviewable decisions
took effect.6
[16] The registrar submits there is no practical utility in conducting the merits
review of MTT1 for the purpose of making the ‘correct and preferable’
decision on the material before it because it no longer applies to the
applicant’s registration and she is not at risk of being penalised for non-
compliance since completing the MTT2 course. He says MTT1 is redundant
and of no ongoing effect and “ceased to apply” as a condition on the
applicant’s registration from 2 June 2015 when it was withdrawn, or at the
latest on 3 June 2015 when the registrar imposed MTT2 under s 120
Payments Act just before the sunset clause took effect.
[17] Alternatively, the registrar says MTT1’s validity and merits should be judged
on the facts and law when it was imposed on 27 August 2014, rather than
with regard to circumstances and changes in the law occurring after it was
withdrawn on 2 June 2015.
[18] He also contends that, as the February 2015 General Conditions were
imposed on all adjudicators in place of a previous set and were themselves
superseded by the June 2015 General Conditions, they therefore no longer
apply to the applicant’s registration and she is not liable to comply with them.
[19] This means, he says, that there is no jurisdiction under s 24 QCAT Act to
“affirm” or “vary” nor “set aside” the decision. There is no utility, he says, in
conducting a merits review of the decision to impose them.
[20] Moreover, according to the registrar, it would be anomalous for the tribunal
to apply current law and facts to an old condition and its validity should be
5 QCAT Act s 19.
6 Ibid ss 24(2).
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judged (if at all) according to the circumstances as they were when it was
imposed in 2015.
[21] The applicant argues that, irrespective of the individual merits of the later
MTT and general condition decisions, they cannot stand if any earlier
decision is effective. MTT2 and the June 2015 General Conditions are either
entirely redundant (in the case of MTT2) or based on inconsistent facts (the
General Conditions). It follows that, at the very least, one of the MTT
conditions and one of the general condition decisions must be set aside or
declared invalid.
[22] Any practical problems with applying the standard review principles and
procedures to MTT1 and the February 2015 General Conditions are not
insurmountable and there is a general utility in deciding the intended scope
of the power given to the registrar to impose conditions on the registration
of an adjudicator.
[23] In any case, in addition to the review powers and procedures, s 60 QCAT
Act allows the tribunal when constituted by a judicial member to give binding
declaratory relief instead of, or as well as, making any other available order
about a reviewable decision. Thus, the power of this tribunal in reviewing
the disputed decisions of the registrar and ensuring they are the correct and
preferable ones having regard to the law and the facts coexists with the
ancillary remedy of declaration.
The Payments Act
[24] In recognition of the importance of financial security in the construction
industry (especially assured cash flow) and the potentially ruinous
consequences for subcontractors of delayed or non-payment for work done,
the Payments Act establishes a state-wide system of expedited referral and
adjudication7 for resolving progress payments disputes.8
[25] Its main policy purpose is to ensure that, irrespective of the relative merits
of cross-claims or other collateral controversies such as allegations of
defective work, sub-contractors and building service providers can recover
independently assessed interim amounts on account of progress payments
from owners and head contractors within prescribed time limits pending final
resolution of any contested liability issues by a court.
[26] The aim is to put an end to the tactic used by unscrupulous developers and
building companies delaying or denying payment to subcontractors on
specious grounds. This is achieved by provisionally transferring the risk of
loss from the most economically vulnerable to the more powerful party to
the contract.
[27] The Payments Act is based on the Building and Construction Industry
Security of Payment Act 1999 (NSW). The main differences between the
7 Payments Act s 8.
8 Section 7.
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two Acts are the Queensland statute’s requirement that adjudicators be
registered and the registrar’s power to impose conditions on their
registration.
[28] When enacted in 2004, the Payments Act utilised the services of authorised
nominating authorities (‘ANAs’). The Queensland Building and Construction
Commission (QBCC or commission) registered ANAs and suitably qualified
adjudicators, nominated training organisations responsible for delivering
courses to aspiring adjudicators, managed a public register of the
registration status of ANAs and adjudicators and also of adjudication
decisions.
[29] Schedule 4 of the ANA condition contained the selection, training and
monitoring requirements. To be eligible for registration as an adjudicator, a
person had to hold an adjudication qualification9 and be, in the registrar’s
opinion, suitable for carrying out the statutory functions having regard to the
matters mentioned in s 60(2) Payments Act, including their relevant
experience, qualifications and other details contained in the application for
registration under s 57 Payments Act. ANAs nominated an adjudicator with
appropriate experience and qualifications to determine a dispute – a
procedure that still applies in NSW today.
[30] In 2012, the Minister for Housing and Public Works released a discussion
paper about the operation of the Payments Act. A barrister, Andrew
Wallace, was appointed to review and assess submissions received in
response from industry stakeholders. The major matters of the inquiry were
the quality of some adjudication decisions, the perception of bias and
conflict of interest of ANAs and the appointment, competence and good faith
of adjudicators;10 despite only 5% of adjudication decisions having been
successfully appealed.
[31] Published in May 2013, the ‘Wallace Report’ made 49 recommendations for
reforming and addressing key stakeholder concerns about the appointment
of adjudicators and the integrity of the adjudication process.
[32] Among them were transferring the power and process for appointing and
registering adjudicators from the ANAs to the registrar,11 training “approved
by the registrar” including attendance or delivery of recognised educational
papers and journal publications or subscriptions, seminars or mentoring,
imposing a requirement on adjudicators to satisfy mandatory minimum
continuing professional development rules (with the aim of increasing the
levels of expertise, professionalism and ethical behaviour), the registration
and grading of adjudicators according their skills, experience and
qualifications (to assist the registry staff in adopting and applying selection
criteria for referring matters to an adjudicator) and additional elements for
9 Section 60(1). Pursuant to s 111, the term ‘adjudication qualification’ referred to a
certificate or equivalent issued by a registered ANA (defined in Sch 1 of the Regulations)
confirming that an adjudication competency standard had been met.
10 Wallace Report pp 128-167, 197-198 and 230-248.
11 Ibid pp 8-13.
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obtaining an adjudication qualification for trade based applicants with no
formal tertiary education.
[33] Wallace favoured “more intensive and detailed” adjudicator training and
refresher courses in line with those earlier recommended by Bruce Collins
QC in New South Wales to increase the expertise, professionalism and
ethical behaviour of adjudicators insofar as they related to the Payments
Act scheme, including the suggestion that they consist of, at least, additional
study modules such as:
(a) an analysis of the legislation;
(b) overview of the law of contract;
(c) analysis of building contracts;
(d) analysis of costs and claims in the building and
construction industry;
(e) detailed analysis of building construction claims and
contractor entitlements; and
(f) an overview of building and construction law.
[34] The Wallace Report informed the Building and Construction Industry
Payments Amendments Bill 2014 (Payments Bill); but not all, most or even
many of its recommended reforms were accepted.
[35] Save for a one-off temporary transitionary training provision, none of the
pre- or post-registration mandatory training or compulsory professional
development recommendations were enacted. The relevant changes were
limited to the establishment of a single QBCC registry with a new referral as
well as registration role and the insertion of s 101, allowing regulations to
be made to give effect to commission policies governing the Act’s
administration.
[36] ANAs no longer train or appoint adjudicators in Queensland due to conflict
of interest concerns, but continue to offer document delivery services.
Registrar’s functions
[37] Subject to the direction of the QBCC commissioner, the registrar is
responsible for managing the registry and its administrative affairs.12
[38] The registrar is eligible for appointment provided he or she has knowledge
and experience in a discipline of substantial relevance to his or her statutory
functions including public administration (but not legal) qualifications.13
[39] He has the powers reasonably necessary to perform his stated functions14
of keeping and making available for inspection a register containing details
of adjudicators, recording and publishing adjudication decisions, and, more
12 Section 38(1).
13 Section 37(1).
14 Section 38(3).
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importantly, referring applications to adjudicators.15 In addition to his
stipulated functions the registrar has “any other functions given under” the
Payments Acts.16
[40] These include:
responsibility for receiving all adjudication applications;17
providing adjudication certificates;18
receiving and deciding all applications for registration as an
adjudicator;19
considering the suitability of a person applying for registration as
an adjudicator20 and any matter relevant to the ability of that
person to carry out the functions of an adjudicator;21
renewing the registration of adjudicators having regard to the
person’s ongoing suitability;22
processing applications for the amendment of an adjudicator’s
registration;23
suspending or cancelling the registration of adjudicators including
immediately if there is an “immediate and serious harm to the
effectiveness of the adjudication of payment claims”;24 and
internally reviewing administrative decisions including his own in
performing his functions and powers.25
[41] He also claims in these proceedings to be impliedly responsible for their
professional standards in so far as monitoring them and providing
mandatory training and ongoing development for grading purposes based
on skills, knowledge and experience in reliance on the Explanatory Notes
to the Payments Bill and one of two QBCC policies prescribed in the
Building and Construction Industry Payments Regulation 2004 (Qld)
(Payments Regulation).26
[42] The Adjudicator Grading and Referrals Policy 2015 (2015 AGR) purports to
provide criteria for grading adjudicators and making referral decisions along
the lines recommended in the Wallace Report so as to “improve the quality
and effectiveness of adjudicator decisions and outcomes”. It directs the
registrar to “select adjudicators … based on an analysis of each application
15 Section 38(2)(a)-(f).
16 Section 38(2)(g).
17 Section 21(3).
18 Section 30.
19 Sections 56(1), 58.
20 Section 59.
21 Section 60(2).
22 Section 70(4).
23 Section 74.
24 Sections 79, 80, 81, 82.
25 Section 93.
26 Regulation 2A and Schedule 1.
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and marry that analysis with a suitably graded adjudicator”27 and “dictates
the grading of adjudicators according to their experience, qualifications, and
skill (gleaned from the mandatory transitionary training and ongoing training
requirements)”.28
Registration requirements
[43] The Payments Act expressly limits registration as an adjudicator to suitable
persons. A person is only suitable for registration as an adjudicator if she or
he holds a defined adjudication or equivalent qualification. The elements
that must be successfully completed to attain competency are prescribed in
Schedule 1A Payments Regulation. Otherwise, suitability is assessed
against the person’s experience and the other matters mentioned in s 60(2)
Payments Act relating to his or her ability to carry out an adjudicator’s
functions.
[44] Registration is effective for a fixed term from the date the certificate of
registration29 is issued or renewed and ends either after three years or on
an earlier date decided by the registrar and stated in the certificate.30
Renewal of registration is governed by Part 4 Division 4 Payments Act and
depends on the same matters as initial registration.
[45] Registration as an adjudicator is subject to compliance with the Payments
Act and other valid conditions the registrar considers are warranted.31
[46] An adjudicator’s registration may be suspended or cancelled if the registrar
forms a belief of the existence of stated grounds including unsuitability or
contravention of a condition32 either immediately to protect the integrity of
the adjudication process,33 or, if he does not change his mind, after
considering show cause representations.34
[47] A monetary penalty of up to $22,000 may be imposed for a contravention a
condition of registration whether or not registration is also suspended or
cancelled because of the breach.35 However, s 107 Payments Act provides
a defence for contraventions committed in good faith.
Adjudication determinations
[48] Adjudication applications are made by claimants to the registrar,36 who
allocates the matter to a registered adjudicator.37 If the selected adjudicator
accepts the application, he or she is deemed to have been appointed to
27 Clause 3.1.1.
28 Clause 3.1.2.
29 Section 62(1).
30 Section 64.
31 Section 65(1)(b).
32 Section 77.
33 Section 82.
34 Sections 79, 80.
35 Sections 67(1), (2).
36 Section 21(3)(b).
37 Sections 21(6), 22(1), 38(2)(a).
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decide it38 for a fee agreed directly with the parties.39 An appointed
adjudicator assesses and certifies the amount, if any, to be paid.40 An
adjudication certificate may be filed as a judgment and any unpaid sum is
enforceable in a court as a debt.41
[49] An adjudicator is only ineligible to determine a particular claim if he or she
is a party to the construction contract in question or if the appointment might
otherwise create a conflict of interest.42
[50] An adjudicator must decide an adjudication application before the
prescribed deadline.43
[51] The three matters an adjudicator is to decide are identified in s 26(1) as:
the amount of the progress payment, if any, to be paid by the
respondent to the claimant (the adjudicated amount); and
the date on which any amount became or becomes due; and
the rate of interest payable on any amount.
[52] The only material considerations for deciding an adjudication application are
specified in s 26(2). They are limited to the provisions of the Payments Act,
Part 4A of the Queensland Building and Construction Commission Act 1991
(Qld) (to the extent relevant), the construction contract and submissions for
and against the claim or schedule.
[53] The adjudicator’s decision must be in writing unless waived by the parties
and include the reasons.44
[54] It is unclear whether an adjudicator is a statutory tribunal exercising
governmental powers or more akin to a joint expert appointed by the parties
to a dispute to make a legally binding determination.45 They are certainly
professional decision makers with implied obligations to act independently,
ethically, rationally and reasonably in good faith within the limits of their
statutory functions and powers without any external influence on them about
what or how particular determinations are to be made.
[55] Notably, there is no statutory right of appeal or judicial review against an
adjudicator’s determination46 and the Payments Act is strongly against
38 Section 23(2).
39 Sections 21(3)(e),(4); see Payments Regulation Schedule 2.
40 Section 26.
41 Section 31.
42 Section 22(2).
43 Sections 25(1),(2); 25A, 25B.
44 Section 26(3).
45 See Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421.
46 Judicial Review Act 1991 (Qld) Part 2; Schedule 1.
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granting of prerogative relief in the nature of certiorari47 to quash a
determination for apparent errors of law or fact in a statement of reasons.48
[56] A determination is not invalid, for example, merely because of non-
compliance with non-essential requirements of law for construing or
applying terms of the construction contract provided a bona fide attempt is
made to resolve a dispute.
[57] A purported determination may only be declared void for jurisdictional error
(e.g. if it is not made according to law or otherwise in excess of power),49 or
fails to meet essential procedural pre-conditions or natural justice
requirements.50
[58] Otherwise, the adjudicated amount is final and conclusive as to progress
payment amounts which must be paid without question pending the
resolution of any court-based litigation about contract breaches or other
issues. If not paid, the determination is enforceable by a court as a judgment
debt, irrespective of the strength of a greater cross-claim.51
Registration conditions
[59] Adjudication registration is subject to the conditions mentioned in s 65
Payments Act:
“65 Conditions of registration
(1) A registration is subject to the following conditions—
(a) the adjudicator must comply with this Act;
(b) other reasonable conditions the registrar considers
appropriate to give effect to this Act and that are stated
in the certificate of registration or in an information
notice given under subsection (3).
(2) Conditions may be imposed under subsection (1)(b)—
(a) when registration first happens or is renewed or
amended; or
(b) at another time if the registrar considers this is
necessary to ensure that an adjudicator effectively
performs the adjudicator’s functions under this Act.
(3) If the registrar decides to impose conditions on the registration
under subsection (2)(b)—
47 Judicial Review Act 1991 (Qld) Part 5.
48 Intero Hospitality Projects Pty Ltd v Empire Interior (Australia) Pty Ltd [2008] QCA 83.
49 Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421 [51], [58].
50 Ibid [57]-[58].
51 See generally Altys Multi-Services Pty Ltd v Grandview Modular Building Services Pty
Ltd [2008] QSC 26; Minimax Firefighting Systems Pty Ltd v Bremore Engineering (WA
Pty Ltd) & Ors [2007] QSC 333.
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16
(a) the registrar must immediately give the adjudicator an
information notice for the decision…”52
[60] Thus, the registrar has limited power to impose ‘other reasonable
conditions’ on the registration of one, some or all adjudicators53 pursuant to
s 65(1)(b), if he subjectively (but reasonably) considers it (or them)
appropriate to give effect to the Payments Act and are stated in the
certificate of registration or an information notice under subsection (3).
[61] Section 65 (1)(b) conditions imposed at ‘another time’ (not being initial,
amended or renewed registration) must, by virtue of s 65(2)(b), be
considered not only appropriate for giving practical expression to the
Payments Act, but also necessary to ensure an adjudicator (or adjudicators)
effectively performs their statutory functions. If the registrar acts under
subsection (2)(b), an information notice for the decision must be given to
the adjudicator ‘immediately’ and, if not stated otherwise, takes effect on
receipt.
[62] There are not likely to be many conditions of registration appropriate to give
effect to the Act or ensure effective performance of an adjudicator’s
functions when simply complying with the Payments Act under s 65(1)(a) is
not.
[63] In addition to s 65, s 120 Payments Act expressly conferred discretion on
the registrar in the period of 14 December 2014 to 15 June 2015 to:
(1) … impose a condition on the registration of an adjudicator that
requires the adjudicator –
(a) To complete the mandatory transition training prescribed by
regulation; and
(b) To pay the cost of the training prescribed by regulation.
(2) This section expires 6 months after the commencement.
[64] Also, as already mentioned, s 38(3) Payments Act invests the registrar with
incidental powers reasonably necessary for effectively discharging his
responsibilities. The parties take a different view as to its scope. The
applicant argues that s 38(3) powers are not auxiliary to ss 65(1)(b) or (2)(b)
and are confined to incidental matters having no connection with
registration. The registrar relies on it to validate general conditions aimed at
improving adjudication standards and practices.
[65] However, as Gavan Duffy CJ and Dixon J said in Anthony Hordern & Sons
Ltd v Amalgamated Clothing & Allied Trades Union of Australia:54
“When the Legislature explicitly gives a power by a particular provision
which prescribes the mode in which it shall be exercised and the
conditions and restrictions which must be observed, it excludes the
52 Interestingly, the NSW Act does not have any counterpart to ss 65(1)(b) or (2)(b).
53 Acts Interpretation Act 1954 (Qld) s 32. The words ‘an adjudicator’ include the plural.
54 (1932) 47 CLR 1; see too Saraswati v R (1991) 172 CLR 1 (McHugh J).
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operation of general expressions in the same instrument which might
otherwise have been relied upon for the same power.”55
[66] On this basis, and regardless of their perceived efficiency or other utilitarian
value, the applicant is correct. Imposing registration conditions is not one of
the powers reasonably necessary to perform the registrar’s functions s
38(3) intends to confer.
The reasonableness requirement
[67] If a condition is not reasonable it cannot be allowed to stand even if it can
otherwise be said to appropriately give effect to the Payments Act.
[68] The registrar submits that a condition is reasonable if it is an incident of
administering the Payments Act, achieving its objectives, performing his
own functions including deciding which adjudicators are the most suitable
to allocate matters to and ensure that they fulfil their intended role.
[69] The registrar relies on the test of reasonableness identified by the High
Court in Minister for Immigration and Citizenship v Li.56 He argues that a
condition is reasonable so long as it is objectively reasonable in all the
circumstances at the time (without the benefit of hindsight) and within the
scope and purpose of the legislation and not arbitrary, vague or fanciful.
The applicant says, by contrast, that test applies to discretions and is not
apposite to the construction of a statutory requirement of reasonableness.
[70] A reasonable condition, according to the applicant, is one that is sensible,
moderate, rational, demonstrates sound judgment, is within the bounds of
common-sense, takes the legitimate interests of others into account, not
greatly more or less than might be expected, tolerable and fair. This
necessarily excludes conditions that are unjust, capricious, whimsical,
eccentric, arbitrary, absurd, excessive, extreme or based on irrelevant or
improper considerations.
[71] Determining whether a condition is reasonable involves an evaluation of the
known facts, circumstances and considerations which may bear rationally
(that is, relevantly) upon the issue in question.
[72] However, as Hayne J said in McKinnon v Secretary, Department of
Treasury: 57
“The expression “not irrational, absurd or ridiculous” is not synonymous
with ‘reasonable grounds’. Of course, absurd, irrational or ridiculous
grounds are not reasonable grounds. But the words ‘reasonable grounds’
do not denote grounds which are “not irrational, absurd or ridiculous. The
statutory words are to be given their ordinary meaning.”
The appropriateness requirement
55 The so-called expressum facit cessare tacitum maxim.
56 (2013) 249 CLR 332; see for example [76] and [98].
57 (2006) 228 CLR 423, 445 [60].
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[73] This requirement imports a subjective element and obliges the registrar to
consider the appropriateness (fitness or suitability) of a condition to ‘give
effect to’ the Payments Act. It cannot be met if the registrar fails to properly
construe what ‘give effect to’ means in the conditions context. An opinion
formed on a misunderstanding of the law under which a person acting under
a statutory power acts is a nullity, because a person cannot confer power
on oneself by mistake.58
[74] The applicant submits that relevant to assessing the appropriateness of the
conditions generally are their nature and ‘sheer number’. These reviewable
conditions are inappropriate because they disclose the registrar’s evident
lack of trust in the applicant’s professionalism which must, in turn,
undermine the confidence of others in the adjudication system.
[75] Also, she says, the reviewable conditions inappropriately allow the registrar
to act as ‘judge, jury and executioner’ over any perceived breach of
registration in the absence of any prosecution, hearing or findings; and, in
breach of ss 78(1) and (2) Payments Act improperly deprives adjudicators
of their statutory right to an opportunity to show cause, to no further action
being taken and to any form of review and thereby subverts, rather than
gives effect to, the Act.
[76] Furthermore, a condition could not be ‘appropriate to give effect to’ the
Payments Act if it was incompatible or inconsistent with the paramount
condition in s 65(1)(a) requiring strict compliance with the Payments Act or
contrary to any other express or implied provision about what adjudicators
can do or how it is to be done.
The ‘give effect to’ requirement
[77] The words ‘give effect to’ have been the subject of previous judicial
consideration, particularly in the context of whether a regulation has been
validly made under a statute. Within this body of law, a regulation must “do
no more than enable the provisions of the enactment creating it to be
effectively administered or carried out”.59
[78] In the words of Isaacs J in Carbines v Powell:60
“(t)o ‘give effect’ to an Act is to enable its provisions to be effectively
administered… (The expression) connote(s) that (the thing to be done is)
to be confined to the same field of operation as that marked out by the
Act itself”.
[79] The parties agree the phrase ‘give effect to’ in s 65(3) Payments Act ought
to be interpreted likewise.
[80] Thus, a registration condition will relevantly ‘give effect to’ the Payments Act
if it does not ‘extend the scope or general operation’ or do no more than
58 R v Connell, ex parte Hetton Bellbird Collieries (No 2) (1944) 69 CLR 407, 430.
59 Grech v Bird (1936) 56 CLR 228, 239 (Dixon J).
60 (1925) 36 CLR 88; cited with approval by Dixon J in Grech v Bird (1936) 56 CLR 228.
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authorise ‘subsidiary means’ of carrying it out or are ‘incidental to the
execution’ of its provisions; but not if it attempts to ‘widen’ its purpose or
depart from, or vary, the means provided for giving practical expression to
its ‘plan’.61 In other words, a condition that enables the provisions of an
authorising enactment to be effectively implemented is said to ‘give effect
to’ it.62
[81] It is not enough for a condition to be merely compatible or consistent with
the Payments Act’s objects because, as the applicant rightly points out, they
are a statement of policy aims and a helpful interpretive aid for resolving
ambiguity, not a source of substantive powers.
The necessity requirement
[82] The applicant calls the necessity requirement a ‘very significant’ barrier to
the imposition of conditions on working adjudicators to protect their
independence.
[83] She contends that the ordinary meaning of the word ‘necessary’ is that
which cannot be dispensed with or done without; not merely advantageous
or desirable for the effective performance of an adjudicator’s function. She
says it means that no condition can be imposed on her registration unless
it is considered that she simply cannot perform her functions without
adhering to it.
[84] It is particularly important, she says, that ‘necessary’ not be construed as
‘reasonably necessary’ as the registrar contends, because that term is used
elsewhere in the Payments Act,63 which indicates that Parliament intended
them to have different meanings and there is no contextual imperative for
giving different terms the same meaning. The narrower term was intended
to confine the conditions power over registered adjudicators more than the
other ‘reasonably necessary’ powers given to the registrar to fulfil his own
functions.
[85] The applicant (a practising barrister in New South Wales and senior
adjudicator with nine years’ Payments Act experience whose registration
has been renewed twice) asserts that, in order to be valid, a condition must
be ‘necessary’ for the particular adjudicator to effectively perform their
functions under the Payments Act (i.e. the focus of ‘necessary’ is upon the
adjudicator’s past and likely personal performance of his or her formal
functions under the Payments Act).
[86] In other words, s 65(2)(b) Payments Act is adjudicator-specific and does not
allow the registrar to impose a condition indiscriminately on all adjudicators
to address the perceived shortcomings of one or some of them or raise
standards generally.
61 Shanahan v Scott (1957) 96 CLR 245, 250.
62 Grech v Bird (1936) 56 CLR 228, 239 (Dixon J).
63 Section 38(3).
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20
[87] The word ‘necessary’ in s 65(2)(b), on the registrar’s case, means
‘reasonably necessary’ rather than essential and ‘ensure’ focuses on the
subject reason for imposing the condition. It cannot mean a guarantee of
the intended outcome. On this suggested interpretation, the composite
phrase ‘necessary to ensure’ means ‘reasonable, appropriate and adapted’.
That is, the registrar must subjectively believe (presumably on reasonable
grounds) that the condition is reasonably appropriate and adapted to
facilitate the effective performance by an adjudicator of his or her functions.
[88] The registrar asserts that he must be satisfied that it is necessary for him to
impose the condition at a time other than when registration first occurs,
upon its renewal or amendment (i.e. the focus of ‘necessary’ is upon the
time the condition is imposed). He argues that a condition is necessary
within s 65(2)(b) if it had to be imposed when it was because it could not as
conveniently be done at any other time.
[89] The applicant says this interpretation is unsustainable because it ignores
the stated purpose for which adding the condition must be needed to
achieve (i.e. ensuring an adjudicator effectively performs the adjudicative
function).
[90] She submits that s 65(2)(b) requires that, where a condition is imposed at a
time other than when registration first happens or is renewed or amended,
the condition must be essential to the performance by the adjudicator of
their duties. In other words, a condition cannot be imposed under s 65(2)(b)
unless the condition is indispensable or imperative to the performance by
an adjudicator of their functions under the Payments Act.
[91] However, the registrar suggests such a prescriptive interpretation would
lead to the (surely) unintended result that no condition could ever be
imposed pursuant to s 65(2)(b), because it is impossible to think of any
condition the registrar might impose would have the necessary quality of
being essential to an adjudicator performing their functions under the
Payments Act.
[92] The use of words such as ‘necessary’ (as opposed to reasonably necessary
as in s 38(3)), ‘ensures’ and ‘effectively’, in my opinion, suggests that their
meaning is closer to the applicant’s than the registrar’s suggestion.
[93] Although, as a matter of strict statutory construction, the singular includes
the plural, the question of whether it is necessary to impose a condition
seems focused on the comparative performance of the adjudicators. The
intended function of the necessary condition seems to be to bring the
capacity of an otherwise underperforming adjudicator up to registration
standard.
[94] On this basis, as the applicant submits, the task of assessing necessity
should be approached by reference to the adjudicator’s statutory functions
and asking how they are effectively performed, then determining whether
the applicant has met that standard and in light of the answer, deciding
whether as a fact she needs MTT or CPD to be an effective adjudicator.
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21
[95] In my opinion, having regard to the nature of the adjudication procedure,
the legal status of adjudication determinations and the adjudicator’s
statutory role in making them, the objects and text of ss 65(1)(b) and (2)(b),
in conjunction with their legislative context and ordinary meaning, a
registration condition is ‘reasonable’, ‘appropriate’ and ‘necessary’ in the
intended sense, if it has a rational and relevant connection with the statutory
scheme for adjudication of construction contract progress payment disputes
and is proportionate for achieving the intended goals.
[96] Because of the discretionary nature of registration conditions, and the fact
that non-compliance can have seriously detrimental professional and
economic consequences, the reasonableness requirement implies
consideration of the adjudicator’s personal qualifications, experience and
his or her record of inadequacy or delinquency are material factors in
assessing the reasonableness, appropriateness and necessity of imposing
any (and if so what) training, professional development and general
conditions on his or her registration.
MTT1
[97] MTT1 purports to compel 100% attendance and participation at a two day
training course and require attainment of at least an 80% grade in an exam.
The course material covered proposed changes to the Payments Act
following the Wallace Report regarding functions, natural justice principles,
construction contract law and practice and the conduct of the adjudication
process.
[98] Failure to meet MTT1 attracts a monetary penalty of up to $22,000 and
possible suspension or cancellation of registration.
[99] The applicant contends MTT1 is either (a) void for jurisdictional error or (b)
still on foot because irrespective of his intent the registrar is powerless to
override it via MTT2.
[100] She submits that, in reviewing MTT1 (and both General Conditions), the
tribunal should determine the correct and preferable decision by reference
to the state of affairs (fact and law) existing at the time the registrar made
the original decisions, while the MTT2 and CPD conditions should be assed
as at the review date to take account of:
the remaking of MTT1 and the February General Conditions;
s 120 Payments Act’s relevance to MTT1 as well as MTT2;
the expiry of s 120 on the tribunal’s’ ability to ‘remake’ MTT2;
the applicant’s completion of MTT2 but not MTT1;
the registrar’s referral practices post-2014; and
the 2015 AGR criteria in relation to MTT2 and the CPD condition.
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[101] Whether or not it has been overridden by MTT2, withdrawn, abandoned or
permanently stayed (as the applicant insists), MTT1 has been overtaken by
events. It is, at the very least, dormant – if not extinct. The applicant is not
in jeopardy of incurring any penalty for contravening it and, in any case,
completed MTT2 on 9 October 2015.
[102] However, that does not mean that its validity is practically irrelevant. It is
currently stayed and its future fate needs to be resolved.
[103] The registrar submits64 that MTT1 assisted with the effective administration
of the Payments Act by enabling adjudicators to be competent in the areas
of law required for standard and complex payment claims and to reach an
appropriate decision within the legislated timeframes.
[104] Section 60 Payments Act provides that a person is not suitable to be
registered as an adjudicator unless they hold an adjudication certificate
stating that they have achieved an adjudication competency standard
prescribed under a regulation. The registrar interpreted the intention of s 60
as to ensure competency and considers MTT1 to be in line with this
objective. This view is based on the Wallace Report which, he says,
demonstrates that even though an adjudication qualification is currently
held, more needs to be done to ensure an adequate level of competency so
as to increase the quality of decisions and minimise the number of decisions
that are referred to the Courts.
[105] The registrar argues that at the date MTT1 was imposed the MTT Course
was directly relevant to the exercise of the powers and performance of the
functions of adjudicators under the Payments Act, because they were
required to:
(a) liaise with the registry about certain matters, including the referral
of adjudication applications, the provision of decisions and “other
information” required by the registrar in an approved form;65
conditions on registration; applications for the initial granting of an
adjudication certificate, as well as applications for renewal or
amendment of registration; and matters concerning the
suspension and cancellation of an adjudicator’s registration;
(b) apply the law, including in particular that relating to construction
law and construction contracts;66
(c) be intimately familiar with construction contracts and practical
elements of construction;67
(d) comply with the Payments Act as amended;
64 At [385]-[387] of the closing submissions filed on behalf of the registrar on 26 April 2016.
65 Section 102.
66 Sections 26(1), 27.
67 Ibid.
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(e) provide natural justice to the claimant and respondent, which
included an obligation to act ethically; and
(f) give a decision in writing which included the reasons for their
decision (unless asked not to do so by the claimant and
respondent).68
[106] He also claims MTT1 gives general effect to the Payments Act because the
factors relevant to deciding the suitability of an applicant for renewed
registration as an adjudicator include the experience and qualifications as
well as their likely ability to carry out adjudicative functions. More
specifically, it is essential, says the registrar, for the adjudication process to
be carried out in a manner complying with the Payments Act itself, and that
public confidence in the adjudication process be maintained at its highest
levels.
[107] The reason the registrar reportedly placed “so much importance on the
adjudicators completing the MTT1 Course” was because in the wake of the
Wallace Report he was going to inherit “100+ adjudicators all trained in
different ways by different ANAs, non-tertiary educated adjudicators were
commonly drawn from the industry, and no records of who had undertaken
what training or when, much less an idea whether any adjudicator was
qualified in what (he) believed to be key competency areas”.
[108] The registrar advised the applicant in 2014 that MTT1 was to ensure that
adjudicators effectively perform their functions under the Act, having regard
to the legislative objectives set out in the objects of the Act, the Wallace
Report and the Payments Bill. So that: “all adjudicators commence under
the new regime on a level playing field of knowledge”; others are able to
benefit from (her) “input”; “key areas of competency are held by all
adjudicators” the “consistency” of decisions is improved; and to assist in
ensuring that “decisions (are) made by competent adjudicators” and “the
level of skills and knowledge of… adjudicators is monitored effectively”.
[109] The registrar’s intent in imposing MTT1 was to inform adjudicators of the
changes to be introduced in the 2014 amendments as a means of
increasing the overall skill level of registered adjudicators, “…to reinforce
the high standard that is expected as a condition of their ongoing
registration”; to improve the quality of adjudicator decisions by requiring all
adjudicators to undertake MTT; and to align the skills and training of existing
adjudicators with those of new applicants (who will be required to complete
the modules that form part of the MTT in an adjudication qualification
course, which is currently being developed).
[110] The applicant challenges these objectives as problematic in the following
respects:
concerns purportedly raised in the Wallace report are illusory;
68 Section 26(3).
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creating a ‘level playing field’ is fanciful;
ensuring key areas of competency are held by all adjudicators
defies belief that the registrar has knowingly registered
adjudicators who are not competent in key areas;
improving the consistency of decisions is misguided (and because
if the real objective is consistently correct decisions, because the
evidence suggests the applicant has already achieved this); and
there is no evidence she is not alive to various ethical issues, is
well-equipped to determine jurisdiction and understands the
amendments.
[111] The applicant argues that post-registration training functions cannot be
implied into the Payments Act because it contemplates the regulation of
adjudicator competence or quality only through the mechanism of
registration based on suitability criteria. She concedes that the Payments
Act refers to a minimum standard69 for the registrar to have regard to them
in deciding a person’s suitability for registration;70 but argues the term in this
context, refers to threshold qualifications, as distinct from ongoing
professional training or development which have more to do with
competence.
[112] This interpretation, she says, follows from the ordinary meaning of
‘qualifications’ and other provisions of the Act, including the three-year
period of registration and the fact that there is no limit on the currency of an
adjudication qualification.
[113] The applicant says the registrar’s role (so far as adjudicators are concerned)
on 27 August 2014 was limited to determining their initial suitability for
registration and assessing their ongoing suitability for registration and his
powers in these regards extend only to registering or not registering,
suspending or cancelling registration, and imposing conditions which
facilitate those functions.
[114] Registration implies the ability to carry out an adjudicator’s functions and
the registrar’s imposition of MTT1 is “well and truly outside the field of the
operation marked out for (him) by the Act and wholly ultra vires”. She says
his functions are expressly and exhaustively set out in the Payments Act
and do not extend to achieving any of the stated purposes of MTT1.
[115] The applicant submits that, as the registrar has no power to take account of
an adjudicator’s training or knowledge as part of his functions, it follows, a
fortiori, that, statute apart, he has no power to impose any training
requirement or to assess an adjudicator’s knowledge. She denies that
MTT1 is justifiable by reference to a future expansion of the function.
69 Section 60(1).
70 Section 60(2).
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[116] It is also inconceivable, she contends, that the legislature intended the
registrar to train and assess adjudicators (either directly or indirectly) in
areas in which they are unqualified. If the legislature intended him to have
the powers he says he has, it could easily have made this apparent, but
didn’t.
[117] The applicant, however, says ss 57 and 60 Payments Act specify the only
matters the registrar is allowed to consider or act upon when registering,
suspending or cancelling registrations. In addition to experience and
qualifications and anything else relevant to an adjudicator’s ability to carry
out his or her functions as an adjudicator, they are: prior conviction for a
relevant offence, other than a spent conviction; has held a registration under
a corresponding law that has been suspended or cancelled; been refused
registration under a corresponding law; and has an address in Queensland
for the service of documents.
[118] In any case, she contends the role of referring matters to adjudicators does
not imply a power to train or assess adjudicators and the power to certify
adjudicators was vested in other prescribed bodies in August 2014.
[119] The applicant’s ancillary attack on MTT1 is that it is objectively
unreasonable because it is not aimed at or suited to achieving any
legitimate or worthwhile policy goal. She argues that a condition on her
registration is only reasonable if it compels her to do something that is so
important that it justifies exposing her to a $22,000 fine for non-compliance.
[120] The most important factor establishing the unreasonableness of the training
condition, the applicant says71 is:
“… its imposition without regard to, and in the absence of any suggestion,
let alone any evidence, of any deficiency in the applicant’s qualifications,
experience, ability, skills, knowledge, efforts in keeping current or
understanding of her own errors in circumstances where there is no
probative reason for ignoring those things. This is both fatal to the validity
of the condition and sufficient to justify the setting aside of the registrar’s
decision.”
[121] The only reason the registrar appears to rely on for ignoring her
qualifications, experience, ability, skill and knowledge, the applicant claims,
is his view that every adjudicator, no matter how well qualified, will get
something out of the training course and no adjudicator is infallible.
[122] MTT1 is also unreasonable, the applicant claims, because its meaning and
effect are uncertain and practical requirements excessive or overly onerous.
[123] The applicant disputes the registrar’s characterisation of the Wallace Report
as a document replete with severe criticisms of “gaps in the knowledge and
training” of adjudicators and overall there was no suggestion of, let alone
recommendation for, any wholesale retraining of registered adjudicators
71 Written submissions filed 5 December 2014; [87] of Exhibit 1.
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and, in any case, the only change Parliament adopted was the enactment
of s 120 to retrospectively (but ineffectively) prop up MTT1 and authorise
MTT2. Consequently, the applicant asserts MTT1 was imposed to meet an
illusory deficiency and to that extent is unreasonable.
[124] The applicant considers that MTT1 imperils the status of adjudicators as
independent decision makers exercising quasi-judicial functions in
dispensing economic justice as between private parties.
[125] Finally, she argues that as a body exercising delegated legislative authority,
the registrar has no inherent or implied power to impose the unstated but
intended $650 fee that, she asserts, MTT1 effectively imposes on
adjudicators.
Is MTT1 a valid registration condition?
[126] No. It cannot credibly be argued that the adjudicator education and
assessment mandated in MTT1 enables the provisions of the Payments Act
to be implemented as intended or that the registrar had any statutory source
of power to impose it when he did.
[127] The registrar’s role as at 27 August 2014 did not include achieving any of
MTT1’s stated purposes. When MTT1 was imposed, the registrar’s statutory
powers or functions did not extend to training or examination of registered
adjudicators. The only functions he had then related to registering suitable
persons as adjudicators and removing unsuitable ones.
[128] His functions (or powers) are not currently expressed to extend to the
training or examination of adjudicators or ensuring that they effectively
perform their Payments Act functions and, except for the six-month period
between 15 December 2014 and 15 June 2015 when s 120 operated, the
Payments Act envisaged initial voluntary training being provided to
applicants by the ANAs but has never mentioned any post-registration
training for adjudicators.
[129] Nor did (or does) the Payments Act give the registrar the power or duty to
align the skills and training of registered adjudicators with new registrants
who have done transitionary training, improve the quality and consistency
of adjudication decisions or ensure that all adjudicators start under the post-
2014 amendment regime ‘on a level playing field’.
[130] The registrar has no compulsory training or assessment authority unless he
believes on reasonable grounds that training is appropriate to give effect to
the Payments Act and, even then, not merely because he thinks knowledge
or skill is lacking but only to the extent necessary to ensure proper
performance of the functions of an adjudicator.
[131] MTT1 was clearly imposed on the applicant’s registration under s 65(1)(b)
on the basis that it was reasonable, and considered (a) appropriate by the
registrar to give effect to the Act and (b) necessary to ensure that she
effectively performed her statutory functions. There is no question about the
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registrar’s bona fides or laudable aim to enforce satisfactory adjudication
standards on, improve the overall performance of adjudicators, enhance the
quality of adjudication determinations and maintain industry confidence in
the system, but a condition is not ‘reasonable’, ‘appropriate’ or ‘necessary’
to give or ensure ‘effectiveness’ just because the registrar ‘considers’ it to
be.72 It either is or isn’t. MTT1 may have helped adjudicators come to grips
with the 2014 amendments and be better adjudicators, but, in my opinion,
its beneficial value alone is insufficient for its legality.
[132] Nor does the fact that it was intended to provide education to adjudicators
about salient topics including adjudication registry functions; the December
2014 amendments to the Payments Act; construction law and contracts;
practical elements of construction; conduct of the adjudication by the
adjudicator; natural justice and judicial ethics; and decision making and
writing make it appropriate to give effect to the Payments Act with s 65(1)(b).
[133] Enabling adjudicators to revise and develop their knowledge or increase
their level of skills and knowledge in relation to the scope of their jurisdiction,
as well as the areas of contract and construction law required may assist
them in effectively administering the Payments Act and performing their
functions, but it is not necessary for either purpose, especially in the
applicant’s case.
[134] He could not reasonably or rationally consider MTT necessary to ensure
effective performance of her adjudication functions where the proposed
reforms did not envisage in any substantial change in the practical content
of those functions. Wallace recommended mandatory CPD of adjudicators
and additional qualification standards, but not transitional training
(mandatory or otherwise) and the 2014 amendments did not even adopt
CPD.
[135] Moreover, education about proposed changes to the law yet to be enacted
cannot be for the purposes of ‘this Act’ within s 65(2)(b) Payments Act as it
stood on 27 August 2014 because prospective amendments cannot affect
an adjudicator’s ability to effectively perform functions under the current
provisions. Being trained and examined about proposed changes in the law
that may never happen does not logically ensure the effectiveness of an
adjudicator’s performance under the prevailing regime.
[136] MTT1 is beyond the registrar’s discretionary power to impose conditions
because, though not inconsistent with any stated objects or purposes of the
Payments Act, the condition does not add anything to nor enable the
implementation of its general ‘plan’.
[137] The foreshadowed legislative changes had no impact on the competence
of adjudicators to comply with s 26(2) Payments Act in deciding the matters
in s 26(1). It was not ‘necessary’ (in the sense of being something that
needed to be done) to impose MTT1 on 27 August 2014 for ensuring the
72 R v Connell, ex parte Hetton Bellbird Collieries (No 2) (1944) 69 CLR 407, 430.
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applicant effectively performed her functions under ‘this Act’ within s
65(1)(b).
[138] Another reason MTT1 does not give effect to the Payments Act is because
it contradicts the suitability and eligibility provisions to the extent it is used
as an additional registration or renewal factor not stated in ss 60(2)(a)-(d)
or implied in s 60(2)(e) and breaching it is a ground for suspending or
cancelling registration.
[139] The nature and extent of a registrant’s training, transitionary or otherwise,
is clearly relevant to his or her ability to function as an adjudicator within s
60(2)(e) and, therefore, the registration or renewal discretion, but the only
mandatory requirement for suitability is an adjudication qualification or its
equivalent. Likewise, an adjudicator is ineligible either generally or for a
particular construction contract in a way mentioned in s 22(2); which does
not include MTT.
[140] The registrar’s reliance on the Wallace Report’s concerns and
recommendations is misplaced. His functions and powers are governed by
the Payments Act as written. Meritorious executive or advisory
recommendations made but not implemented by legislation vest no
authority to compel a person to do something they don’t have or want to do.
Adjudicators are bound to comply with the Payments Act and other valid
registration conditions.
[141] MTT1 should be declared void. Even if it was otherwise necessary,
reasonable, appropriate or, even highly desirable, it is beyond power and
treated in law as if it was never made.
MTT2
[142] The MTT Course referred to in MTT2 is identical to the one offered under
MTT1. It includes a component about the 2014 changes brought about to
the Payments Act is included as well as other relevant matters including
contract law, construction law, construction contracts, practical elements of
construction, natural justice, judicial ethics and a refresher on conduct and
decision writing.
[143] Reg 3B(1)(a) Payments Regulation states that for s 120(1), “the mandatory
transition training is the ‘Mandatory Transitionary Training Course’
approved by the commission and notified by the commission on the
commission’s website”. The cost of MTT2 is fixed at a maximum of $650 by
Reg 3B(1)(b).
[144] The applicant denies that there is any evidence of a course ‘approved’ by
the QBCC or notified on its website as required by s 120; or that the QBCC
has any power to approve training courses for adjudicators anyway. If there
is no course matching this statutory description, a condition requiring its
completion cannot be either reasonable or appropriate to give effect to the
Payments Act.
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[145] The thrust of the applicant’s submission is that the QBBC’s notification of
the MTT Course was inadequate, or insufficient, for the purposes of Reg 3B
Payments Regulation because it did not publish the course’s ‘substance’ on
its website. Rather, the website refers to the commission approval of the
‘mandatory transitionary training course to assist adjudicators’ under the
Payments Act which does not constitute ‘notification’; which requires
‘bringing to notice the terms’ as with regulations so that they can be read by
those bound by them.
[146] The registrar claims that the tribunal does not have jurisdiction to determine
whether the commission’s purported notification of the MTT Course was
valid or not for the purposes of Reg 3B(1)(a), but says in any event that
since 27 May 2015, the commission has continuously published on its
website an announcement that it had approved a “Mandatory Transitionary
Training Course” to “assist adjudicators” under the Payments Act.
[147] Alternatively, it is submitted that the word ‘notified’ in Reg 3B should be
interpreted according to its ordinary meaning. When read in context, and
having regard to the purpose of the legislation, it is the registrar’s view that
‘notified’ means to publish the fact of the course on the QBCC website.
[148] In addition, the registrar relies on inferences from the QBCC’s approval of
the tender submitted by the successful provider.
[149] MTT2 was imposed on the registrations of all adjudicators who at that time
had not completed MTT1. The applicant was one of them. The registrar’s
stated intention in imposing it was to:
give those adjudicators who had not already completed the MTT
Course a further period of time within which to do so;73
improve the quality of adjudicator decisions by requiring all
adjudicators to undertake the MTT Course;
align the skills and training of existing adjudicators with those of
new applicants (who will be required to complete the modules that
form part of the MTT in an adjudication qualification course, which
is currently being developed);
comply with what the registrar believes is a clear expression of
intention by the legislature74 that he should require all adjudicators
to undertake the MTT Course; and
comply with what the registrar believes is a clear expression of
intention by the legislature75 that he should, in referring
adjudication applications to adjudicators, apply the 2015 AGR
which requires him to have regard to (amongst other matters) the
73 In effect, it gave those adjudicators a further period until 1 September 2015 to complete
the MTT Course.
74 Found in s 120 and Reg 3B.
75 Found in Payments Regulation Reg 2A and Schedule 1.
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30
skills of an adjudicator, including whether an adjudicator has
completed the MTT Course and, if so, their training score.
[150] Bar the applicant, who obtained a stay from the tribunal with respect to
compliance, the time for compliance with MTT2 expired on 1 September
2015. The registrar considers any adjudicator who has failed to complete
the MTT Course by this date to be in breach of MTT2 and liable to summary
prosecution or disciplinary action.
[151] In the applicant’s eyes, MTT2 is an attempt to deprive the tribunal of
jurisdiction and herself of the benefit of the stay she had obtained.
[152] Her objections to MTT2 can be summarised as:
the power to impose conditions on her registration is exercisable
only once during the term of that registration and denies any
statutory authority allowing the registrar to self-correct by ‘re-
making’ a decision (MTT2) unless the first (MTT1) was negated by
jurisdictional error;
the registrar had no power to revoke MTT1 or ‘remake’ it as MTT2
even under s 120 because he was functus officio and, therefore,
both MTT1 and MTT2 are invalid;
section 23 of the Acts Interpretation Act 1954 (Qld), which refers to
the performance of a statutory function or exercise of a grant of
power “as occasion requires”, is not engaged because it does not
mean whenever it pleases the registrar or whenever he turns his
mind to the matter or permit him to ‘re-make’ a decision to impose a
condition;
the registrar had no power to impose it where MTT1 was under
external review;
MTT2 is unauthorised by s 120 because it includes assessment as
well as instruction;
the course work goes beyond ‘transitionary training’;
MTT2 is virtually the same as MTT1; but
there was never any QBCC-approved course notified on its website
and, therefore, it is neither reasonable nor appropriate to impose it
because of potential enforcement and disciplinary action for not
complying with the impossible or non-existent.
[153] She also characterises MTT2 as an attempt to illegitimately influence how
adjudicators perform, and are seen to perform, their functions under the Act
complains of the inappropriateness of:
any single person, let alone a non-legally educated statutory
office holder determining the content, standard and
presentation of a predominantly legal course;
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one adjudicator training and assessing all his colleagues and
competitors in circumstances where the assessment is
subjective, non-transparent and unreviewable;
someone who acts for parties in adjudication training and
assessing all adjudicators;
the wholesale restraining of adjudicators who, by virtue of their
registration, possess the qualifications the Act requires them to
possess; and
assessment by exam.
[154] Alternatively, she says, MTT2 should be set aside because the expiry effect
of the sunset clause means it must be regarded in law as never having
existed because there is no saving clause.
[155] She also contends the tribunal has no power to impose a training course
itself because the source of the power has expired. It is not to the point to
ask whether MTT2 was validly imposed under s 120 because the question
is whether the tribunal, standing in the registrar’s shoes, can now impose
MTT2.
[156] The applicant makes essentially the same reasonableness criticisms of
MTT2 as she levels at MTT1 – the course content, level, standard,
presentation and other matters tell against the necessity and
reasonableness of the training condition.
[157] The registrar submits that MTT2 is appropriate to give effect to the Act for
the purposes of s 65(1)(b) on the basis that he is required:
to refer applications to adjudicators76 and has all powers reasonably
necessary to perform that function;77
to determine the suitability of a person to be registered as an
adjudicator;78
to determine applications for renewal of registration;79
to determine, inter alia, whether they are not, or are no longer, a
suitable person to hold the registration;80
76 Sections 23, 38(2)(a).
77 Section 38(3).
78 Section 60.
79 Section 70.
80 Section 77(1)(a).
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with regard to, inter alia, “anything else relevant to the person’ ability
to carry out the person’s functions as an adjudicator”81 including
skills, knowledge and experience.
[158] In response to the argument that MTT2 is unauthorised because it goes
beyond the ‘transition training’ or ‘training about adjudication changes’
ushered in by 2014 amendments, the registrar says that, having regard to
the purpose of MTT2, training in s 120 includes ‘training course’ in Reg 3B
which is wide enough to encompass instruction and assessment.
[159] If, on the other hand, s 120 is found to be unclear, the registrar directs
attention to extrinsic materials pursuant to s 14B Acts Interpretation Act
1954 (Qld) including the Explanatory Notes to the Queensland Building and
Construction Commission and other Legislation Amendment Regulation
(No. 1) 2015 (Qld), which inserted Reg 3B, states its policy objects
prescribing mandatory training requirements for adjudicators for the
purposes of s 120 as “to improve the quality of adjudicators decisions and
align the skills and training of existing adjudicators with those of new
applicants”.
[160] The registrar points to the Explanatory Notes as putting it beyond doubt that
the “mandatory transitionary training” prescribed by s 120 Payments Act
and Reg 3B is not limited in the way the applicant suggests.
[161] The Explanatory Notes to the Amended Payments Act Bill tabled in
Parliament on 11 September 2014 relevantly states:
“Training of adjudicators:
A transitional provision is to be added to the Bill to clarify that the registrar
has the power to require completion of transitional training by registered
adjudicators.
While the training will cover the changes to be brought about by the
amendments in the Bill, the training will also go beyond that in dealing
with areas identified as necessary for training of adjudicators to include
contract law, construction law, construction contracts, practical elements
of construction, natural justice, judicial ethics and refresher on conduct
and decision writing.”
[162] Moreover, in performing his referral function, the registrar must comply with
the guidelines established by 2015 AGR approved under Reg 2A which
requires him to grade an adjudicator by considering, amongst other matters,
the skills and experience of the adjudicator; specifically including “results
obtained from the transitionary training”.82
[163] An adjudicator’s refusal to undertake training or poor performance are
potentially something the registrar says he might consider in assessing the
suitability of a person to be registered as an adjudicator pursuant to s 60 of
81 Section 60(2)(e).
82 Clause 4.3.
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33
the Payments Act, or to have their registration renewed pursuant to s 70. It
might also lead the registrar to impose a condition on the person’s
registration pursuant to s 65.
Was MTT2 a valid registration condition?
[164] Yes. MTT2 is authorised by s 120 Payments Act but only to the extent it
requires completion of MTT prescribed by regulation – which itself is only
valid only insofar as it actually carries s 120 into effect.
[165] The terms of s 120 do not tend to confirm that s 65(1)(b) is strong enough
on its own to authorise MTT either prior to 15 December 2014 or after 15
June 2015. On the contrary, they were needed to ‘clarify’ that for a short
space of time the registrar has the power to require completion of
transitionary training by registered adjudicators. Otherwise, he does not.
[166] Although s 120 expired on 14 June 2015, it was fully operative at the time
MTT2 was imposed. Its legality is unaffected by its subsequent lapsing.83
[167] Contrary to the registrar’s submissions, MTT2 is no more supported by s
65(1)(b) than MTT1 is. It was made under a completely different power
specifically conferred on him for a six-month period by s 120 and effectively
replaced MTT1, which was void anyway for exceeding the registration
power in s 65.
[168] There is nothing uncertain or ambiguous about s 120. Resort to the
Explanatory Notes is, therefore, not permitted or necessary to aid the
interpretation of the text of the Payments Act or fix the limits of the registrar’s
power. Accordingly, the sponsoring Minister’s personal beliefs, the
commission’s policy goals and Wallace’s recommendations are all
immaterial.
[169] It is not possible at this distance to resolve the debate between the parties
about whether MTT2 was ‘notified’ on the QBCC website or is invalid to the
extent of its assessment component or went beyond purely transitionary
training – because the applicant has complied with its requirements. Any
adjudicator who hasn’t can raise any irregularity if and when any action is
taken to discipline or punish them for non-compliance.
The CPD condition
[170] A requirement of successful completion of the CPD requirements in the
CPD Guide (the CPD Condition) was imposed on all registrations on 26 May
2015 “to ensure fairness and uniformity of approach” consistently with
similar programs conducted in like professions.
[171] CPD activities include attending workshops, conferences and seminars
delivered by approved providers, delivering course of conference papers or
lectures, industry publication, mentoring, peer reviewing decisions of other
adjudicators and satisfactory completion of relevant tertiary modules. The
83 Acts Interpretation Act 1954 (Qld) ss 20(2)(b),(c).
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CPD program is flexible and wide enough to allow an adjudicator to obtain
the ten points required annually with relative ease and compliance does not
imperil the applicant’s independence as a decision maker.
[172] The registrar primarily relies on s 65(2)(b) Payments Act as the source of
power to impose this condition. He says it was necessary for him to impose
the mandatory CPD condition, for example, to facilitate his functions
including the registration and grading of adjudicators and referral of disputes
to them for resolution.
[173] The inadequacies of the previous ANA training system highlighted in the
Wallace Report84 and the recommendation for a “more regulated form of
CPD” to be introduced are also offered as justifications. In the registrar’s
view, mandatory CPD is reasonable in light of the purposes of the Payments
Act and the functions adjudicators perform and points out that the necessity
for adjudicators to undertake mandatory CPD was a Wallace Report
recommendation.
[174] The registrar also supports the imposition of this condition on the basis that
it ‘gives effect to’ the Payments Act under s 65(1)(b) by aiding his function
of determining a person’s suitability for registration as an adjudicator.
[175] In deciding whether to renew, cancel or suspend and adjudicator’s
registration and referring applications to them, under s 60(2)(e) Payments
Act he is ‘entitled’ (indeed required) to have regard to their skills, knowledge
and experience as an adjudicator in discharging his registration functions
which entitles him to consider those factors in relation to the person’s ability
to carry out an adjudicator’s functions when assessing suitability for
registration, as well as renewal or cancellation issues.
[176] He also considers the incidental power conferred by s 38(3) Payments Act
enables him to require CPD as a mandatory condition of registration. The
reasonable necessity of imposing the condition stems from the registrar’s
identification of the need for the applicant to undertake CPD which
commenced on 1 July 2015 before the renewal date of her current
registration on 5 October 2015, having regard to the registrar’s and
applicant’s own powers and obligations under the Payments Act.
[177] He also points to the Explanatory Notes to the 2014 amendments as
confirming he has been tasked “to monitor performance and appoint
adjudicators based on skills, knowledge and experience” and by the 2015
AGR policy “to improve the quality and effectiveness of adjudicator
decisions and outcomes” via referral and grading criteria based in part on
the skill of the adjudicator gleaned from the MTT and ongoing training
requirements.
[178] The registrar relies on 2015 AGR as prescribing the criteria for exercising
his referral power. It requires him to marry the analysis of each application
84 At [356].
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35
with a graded adjudicator85 and in grading adjudicators have regard to their
experience and qualifications as well as “the skill of the adjudicator (gleaned
from the mandatory transitionary training and ongoing training
requirements)”.86 He regards completion of mandatory CPD as a means of
promoting adjudicators to a higher grade.87
[179] The applicant contends the CPD condition does not give effect to the
Payments Act because the registrar’s functions and powers in relation to
adjudicators are limited to determining the suitability for registration and do
not include any general supervisory, management or developmental
function and is not responsible for adjudicator qualifications or training.
[180] The CPD condition is not appropriate either, in the applicant’s submissions,
because it is invasive and demonstrative of a lack of trust.
[181] She says CPD may be reasonably necessary to ensure that an adjudicator
effectively performs adjudicative functions and thus considered by the
registrar as appropriate to give effect to the Payments Act and reasonably
necessary to perform his registration, referral, grading and disciplinary
functions but only with respect to ‘an adjudicator’ (not all adjudicators) just
to ensure fairness and uniformity of approach.
Is the CPD condition a valid registration condition?
[182] No. Neither the QBCC policy document nor the Explanatory Notes to the
2014 amendments are a source of power authorising the registrar to
register, monitor the performance of or appoint adjudicators based on CPD
or ‘ongoing training requirements’ not authorised by ss 65(1)(b) or (2)(b)
Payments Act.
[183] Interpretive aids may be consulted to resolve an ambiguous or confusing
provision, but they are not substitutes for the text of the statute in
ascertaining intention and must yield to the extent of any inconsistency with
actual provisions of the Payments Act.
[184] Given the Act’s objects and purposes, adjudicators’ functions under it, and
the need for public confidence in the adjudication process, it is reasonable
to expect and require that adjudicators conduct themselves professionally
and in a competent manner, but that does not mean the registrar has the
power (even if he had the capacity) to force them to be.
[185] The commission may genuinely and understandably intend the registrar to
apply 2015 AGR in grading adjudicators; but it really assumes, rather than
purports to mandate, CPD. 2015 AGR is an administrative policy of the
QBCC, not a source of power to impose a condition on adjudicator
registration. Commission policies are given effect to by regulations so the
85 Clause 3.1.1.
86 Clause 3.1.2.
87 Clause 4.3.
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Payments Act can be administered or carried into effect, but it is firmly
established that a power to make regulations:
“…does not enable the authority by regulations to extend the scope or
general operation of the enactment but is strictly ancillary. It will authorise
the provision of subsidiary means of carrying into effect what is enacted
in the statute itself and will cover what is incidental to the execution of its
specific provisions. But such a power will not support attempts to widen
the purpose of the Act, to add new or different means of carrying them
out or to depart from or vary the plan which the legislature has adopted
to attain its end.”88
[186] No doubt, CPD is a reasonable way to develop adjudicators’ skills,
knowledge and experience as the registrar contends, and they may all be
matters relevant to referral decisions and grading adjudicators under 2015
AGR. Again, though, the practical value of CPD as a registration, referral or
grading tool is really beside the point.
[187] Valid registration conditions have to be more than efficient. They must tend
to ensure effective (not more or the most effective) performance of an
adjudicator’s functions. As I have already noted, what an adjudicator has to
do and how he or she must go about doing it are dealt with exclusively in
the Payments Act. They are joint experts who calculate a liquidated amount
by reference to an agreed formula or schedule, having regard only to the
matters mentioned in s 26(2) Payments Act in an expedited interim process
that is almost unreviewable and creates a virtually undeniable debt.
[188] CPD is not a valid registration condition merely because it is common in
other professions or would probably improve adjudicator competence and
the quality of their determinations.
[189] Also, as with MTT1, the CPD condition is invalid to the extent of any conflict
with the express suitability and eligibility provisions of s 22. 2015 AGR does
not operate to indirectly add a ground of suitability or ineligibility not
mentioned in ss 22 or 60 Payments Act.
[190] I should make it clear, too, that even if a CPD condition is capable of being
considered appropriate by the registrar to carry the Payments Act into
effect, it was not reasonable or necessary, in my opinion, for him to impose
this one on the applicant’s registration to ensure the effective performance
of her adjudication function.
[191] There is no objectively reasonable, rational or logical basis for concluding
that mandatory CPD is necessary to ensure either she performs her
functions under the Payments Act.
The February 2015 General Conditions
88 Shanahan v Scott (1957) 96 CLR 245, 250, approved in R v Toohey ex parte Northern
Land Council (1981) 151 CLR 170.
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37
[192] The disputed conditions are 2(a)(i),(ii) & (iii),(b),(c),(f),(g),(h),
(i),(j),(k),(l),(m),(n),(o),(p),(q),(r),(s),(u),(v),(w),(x),(y) and (z).
[193] The applicant contends that no reasonable person could have concluded,
as the registrar appears to have done, that any of the balance of the
disputed conditions are necessary to ensure her effective performance of
the functions of an adjudicator. She complains the conditions as a whole
amount to the micromanagement of supposedly independent professionals
exercising a statutory adjudicative function and inappropriately impose
disproportionate time and financial burdens.
[194] In addition, disputed conditions 2(f),(i),(j),(m),(p),(q),(u), and (x) allegedly do
not give effect to the Payments Act.
[195] The registrar contends that, contrary to the applicant’s assertions,
conditions 2(i),(k),(l),(m),(p),(q) and (u) are all reasonable in the relevant
sense because they accord with the scope and purpose of the Payments
Act and do not result from an arbitrary, vague or fanciful exercise of
discretionary power.
[196] The operation of 2(b) and (c) are stayed by agreement pending the outcome
of the QCAT review.
Condition 2(f)
[197] This condition requires the applicant to inform the registry of a ‘physical
address’ in Queensland for service of documents. The virtue of a physical
address is that a courier can be used to deliver documents personal to the
adjudicator (or his or her accountant, business or other agent) to meet time
demands and otherwise facilitate compliance with adjudication procedures.
It also adds to information security and reduces the risk of loss.
[198] The applicant objects that the requirement is inconsistent with s 57(b)
Payments Act which she says is met by ‘an address’ in Queensland. She
insists a post office box is sufficient and refuses to appoint a Queensland
agent.
[199] A condition that the applicant concedes does give practical effect to the
Payments Act and is within power is one requiring an adjudicator to update
any changes to his or her address for service of documents, as it stays
within the confines of the Act’s operation and is not repugnant to or
incompatible with any other provision. By contrast, she says, a condition
purporting to direct adjudicators where to maintain a physical presence
does not have that character.
[200] The registrar disagrees and says that a non-physical address, such as a
post office box, is not envisaged by s 57(b) because of the practical
difficulties in delivering voluminous hard copy adjudication-related
documents which will not fit in a post box and the potential for delay in
acceptance.
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Condition 2(i)
[201] This condition requires the applicant to declare any conflict of interest “in
detail”. The applicant says it does not give effect to the Act to the extent it
exceeds what is necessary to determine her eligibility under s 22. The
registrar takes the view that it aids the object of referring a disputed progress
payment claim to an adjudicator free of any conflict or other impediment to
decision making, such as partiality or bias (which was a key concern for
industry stakeholders).
Conditions 2(j) and (m)
[202] These conditions require copies of specified notices to be given to the
registrar within a business day. The applicant claims the requirement is at
odds with s 102(b) of the Act, which only contemplates to information in
approved forms, whereas the registrar says it falls squarely within the term
‘other information’ in the provision and is ‘imperative’ to the operation of the
Act for him to know when and if an adjudication has been accepted so an
alternative adjudicator can be arranged if needs be. He also claims that
advising him of any amended timeframes is necessary “for the efficient
management of the decision making process”.
Conditions 2 (p) and (q)
[203] These require the applicant to provide a copy and proof of service of her
adjudication decision and any corrected decision to the parties. The
conditions are justified by the registrar on the basis that they ensure the
effective administration of the decision making procedures which he says
necessarily includes service to the parties paying for it. The applicant
submits that their terms are contrary to s 102(a) of the Act which makes no
reference to proof of service. The registrar denies any inconsistency and, in
any case, relies on the “other information” clause in s 102(b).
Condition 2(u)
[204] This condition relates to notification of any changed registration details and
is objected to as having no bearing on the applicant’s suitability for
registration.
[205] The applicant concedes that a condition requiring disclosure of any matters
affecting an adjudicator’s suitability matters would be valid to the extent it
helped in considering registration; the registrant’s continuing fitness for
registration,89 such as bankruptcy, incapacity and the like. However, a
condition requiring disclosure of matters that do not go to suitability would
not give practical effect to the Payments Act.
[206] The registrar responds by saying that the condition gives effect to the
Payments Act to the extent it seeks timely information about matters
relevant to a ground of suspension or cancellation of registration such as
89 Section 77(1)(a).
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ongoing suitability, having regard to professional conduct and compliance
with conditions and the Act and any changes in circumstances since initially
applying for registration.
Condition 2(x)
[207] This condition requires the applicant to notify the registrar under s 87(1) of
the Act of any intention to surrender registration if she is “unable or unwilling
to continue to provide to the public the services of an adjudicator”. The
applicants contends that the conditions is inconsistent with, and exceeds
the scope of, s 87(1) which does not require any explanation for
surrendering registration.
The June 2015 General Conditions
[208] On 10 June 2015, the registrar sent the applicant an Information Notice
imposing the June 2015 General Conditions on the applicant’s registration
as an adjudicator. Paragraph 2 of that Notice contained a number of
separate duties or obligations cast upon adjudicators.
[209] Many of the February 2015 General Conditions are substantially the same
as the June 2015 and are objected to on similar grounds.
[210] However, conditions 2(b), (c), (d) and (e) relating to engaging a local agent
were not reproduced and are now fully contained in the 2015 AR Policy.
[211] The registrar maintains they and all the other June 2015 conditions are
reasonable, appropriate to give effect to the Payments Act and necessary
to ensure effective performance. Otherwise he relies on the submissions
made in support of the corresponding February 2015 conditions.
[212] The registrar withdrew conditions 2(a)(ii), 2(a)(iii), 2(b) and 2(n), and
reworded condition 2(d) pursuant to s 95 Payments Act in a Review
Decision on 17 July 2015.
[213] The applicant claims that General Conditions 2(c) and (e)-(n) (excluding (j))
do not give effect to the Payments Act.
Condition 2(a)(i)
[214] This condition imposed on all adjudicators obliges adjudicators, at all times
in the discharge of his or her duties, to conduct themselves in a professional
and competent manner.
[215] The applicant does not specifically object to condition 2(a)(i) but notes that
it only expresses what the Payments Act implies and to that extent gives
effect to it. However, the registrar’s referral function and incidental power
do not confer any power to require professionalism and competence as a
precondition, as distinct from criteria, for referral. Likewise, the registrar’s
authority to have regard to suitability matters for initial and ongoing
registration purposes does not give him regulatory power over registered
adjudicators.
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Condition 2(c)
[216] This condition obliges adjudicators to provide a physical address in
Queensland for the service of documents. As with 2(f) of its predecessor,
the requirement’s intended purpose is to avoid risks in postal or online
delivery. The registrar relies on the referral function and the reasonable
necessity of performing that function of delivering hard copy documents on
an urgent basis via courier. This condition gives practical effect to the
Payments Act says the registrar by aiding the performance of the registrar’s
functions. Having a physical, as opposed to electronic, address in
Queensland is also more convenient for the Registry for over-the-counter
lodgements.
Condition 2(d)
[217] This is not a condition of registration but a statement of intent or a standard
operating procedure.
Condition 2(e)
[218] This is imposed on the basis of the adjudicator’s responsibility in s 102(b)
Payments Act to give the registrar, when he specifies, the information (other
than a copy of the adjudicator’s decisions) required in the approved form.
The commissioner may approve forms for use under the Payments Act. All
forms mentioned in condition 2(e) appear to have been approved,90 but in
any case, they are a necessary aid to the performance of the referral
function and give effect to the Payments Act for that reason.
[219] The applicant raises the same objection to this condition as she does to
conditions (j) and (m) of the February 2015 General Conditions.
Condition 2(f)
[220] The information sought under this condition lets the registrar know whether
an adjudicator has accepted a refusal and been appointed under the
Payments Act and enables the registrar to restart the referral process (if,
say, the preferred adjudicator is conflicted or unavailable) keep track of the
progress of adjudication applications and monitor an adjudicator’s
acceptances so as not to overload him or her. This condition enables or
facilitates the statutory scheme.
[221] The requirement to provide copies of notices of acceptance in 2(f) is
contrary to the Act which leaves the discretion to accept matters to
adjudicators are not for any lawful purpose and arbitrary because only one
day is allowed. The only things an adjudicator is obliged by law to provide
the registrar are a copy of decisions and “the other information” required in
“the approved form” under s 102 Payments Act. There is no requirement to
provide notices or completed referral kit forms.
90 Affidavit of Jenny Phillips (4 September 2015) [10]-[11].
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[222] 2(f) is also inconsistent with s 23(1) Payments Act, which gives adjudicators
discretion to accept an adjudication notice by serving an acceptance on the
parties.
Condition 2(g)
[223] This requires notification to the registry of the due date for a decision
(meaning the deadline calculated under ss 25A or B). The registrar says
this gives effect to the Payments Act because it assists the performance of
the referral function, using the information for reporting purposes and
monitoring progress and performance. The applicant raises the same
objection to this condition as she does to conditions (j) and (m) of the
February 2015 General Conditions.
Condition 2(h)
[224] This requires all adjudicators to fill in an approved form advising the registry
that a decision has been made and the parties of the fee payable for
release. The registrar contends that it is essential for him to know when a
decision has been made for him to properly perform his record keeping and
publishing functions and report to the commissioner on the time taken to
resolve adjudication applications and whether statutory decisions are met.
Condition 2(i)
[225] This requires the adjudicators to inform the registry of the release of a
decision to the parties within two days so the registrar can obtain a copy of
it for publication purposes and recording and reporting on trends concerning
the result of adjudicators, the degree of success of a party. It requires
adjudicators to provide decisions corrected under s 28 Payments Act. This
facilitates ss 38(2)(e) recordkeeping and publication functions and s 102
information obligations of adjudication.
Condition 2(k)
[226] This requires adjudicators to inform the registry of any court or legal action
in respect of an adjudication within five business days. The purpose is to
give effect to and aid the discharge of the registrar’s reporting obligations
and his functions generally. Adjudicators are not required by s 102(b) to give
this information as “the other information required in the approved form”.
Condition 2(l)
[227] This condition refers to written notification of any change of the applicant’s
address or contact details within five business days. The registrar relies on
the implied power in s 38(3) for performing the referral function if restricted
to address in Queensland for service of documents.91
Condition 2(m)
91 Section 57(b).
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[228] This condition requires adjudicators to update suitability information or other
details in a registration application within five days including “conduct,
qualifications and experience”. This is necessary to help the registrar
perform his functions of administering the registry, appointing adjudicators,
renewing applications for registration, suspending and cancelling
registration, referring applications and grading adjudicators.
[229] This is directed at the fiduciary obligations of disclosure of positive or
negative suitability and capacity information92 he needs for the renewal
function,93 suspension and cancellation functions94 and apply the grading
criteria in 2015 AGR.
[230] The applicant says General Conditions 2(c) and (d) relating to a physical
Queensland address are inconsistent with s 57(b) Payments Act.
Are the 2015 General Conditions valid registration conditions?
[231] No. They may be perfectly reasonable and reflect best registry practice but
they are not at all appropriate to give effect to the Payments Act and none
are necessary to ensure the effective performance of the applicant’s
functions under it.
[232] The statutory condition of registration binds all adjudicators to complying
with the Payments Act; not to the registrar’s version of it. The prerequisites
for the registration conditions power are appropriateness to give effect to
the Act and necessity to ensure effective (not efficient) performance of
adjudication (not the registrar’s) functions.
[233] The registrar has no authority to impose his will on adjudicators via
registration conditions where it is not needed to ensure effective
performance with their (not his) functions. Nor will his misinterpretation of
the adjudicators responsibilities under s 65(1)(a) relieve them of any liability
for breach of ss 57(b), 102(b) or 231.
[234] The adjudicator’s duty to avoid conflicts of interest or meet timeframes for
providing approved forms under s 102(b) does not warrant the registrar’s
asserted power to require them to return unapproved forms either at all or
within a shorter time than s 102(b) requires merely to aid the performance
of his reference or appointment roles.
[235] I do not accept that the registrar’s referral function95 includes implied
authority to direct that an adjudication application may be sent and must be
received in a particular manner by a specified time or only at a physical
address in Queensland.
[236] Nor do ss 65(1)(b) or (2)(b) Payments Act include a power to require an
adjudicator, as a condition of registration, to provide the registry with a copy
92 Section 60(2)(e).
93 Section 70(4).
94 Section 77.
95 Sections 23, 38(2)(a) and 38(3).
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of the notice of acceptance regardless of how much that would assist in
referring applications to adjudicators. Likewise, a requirement to notify the
registrar of the due date for a decision once it is known or varied.
[237] The incidental power in s 38(3) does not authorise registration conditions
that are not within the scope of s 65(1)(b) or without complying with ss
65(2)(b) and (3) when imposed at a time other than initial, amended or
renewed registration.
[238] Therefore, a power to require an adjudicator to notify the registrar when a
decision has been made by a stipulated time cannot lawfully be imposed as
a registration condition via s 38(3). The extent of the duty is to provide the
relevant details in a ‘decision made’ form (if it is formally approved) or,
otherwise if not, as “other information” under s 102(b).
[239] Again, an adjudicator’s obligation to inform the registrar when a decision
has been released (or corrected under s 28) is limited to the provision of
written reasons as a statutory obligation under s 102(b); not for the
purposes of helping the registrar’s record keeping or annual reporting
functions under ss 38(2)(e) and 41.
[240] There is no head of power under ss 65(1)(b) or 2(b) or elsewhere in
Payments Act authorising the registrar to demand adjudicators notify him of
known court or legal action in respect of an adjudication application (or
determination) within five business days or at all.
[241] Notification of any change of address or contact details cannot be made a
registration condition except as implied by s 57(b). Likewise with any
changes in details supplied in the registration application (except suitability
disclosure the fiduciary relationship implies) for grading or related purposes.
[242] Obviously, the intention of the registrar in imposing the general conditions
is to facilitate the cost and time efficient management and administration of
the registry and improve its services to adjudicators and industry
stakeholders. They seem to be fit for that purpose and do not appear to be
overly onerous to fulfil, but it is their legality that is at issue in these
proceedings, not their common sense, efficiency, practicality or utility. The
question is whether the applicant is legally liable to comply with them under
pain of pecuniary penalty if she refuses to. In my view, they are not.
ORDERS
1. MTT2 is confirmed to the extent that it conforms to the terms of s 120
Building and Construction Industry Payments Act 2004 (Qld).
2. MTT1, the CPD Condition, the February 2015 General Conditions
2(f),(i),(j),(k),(m),(p),(q),(u) and (x) and the June 2015 General Conditions
2(a)(i),(c),(d),(e),(f),(g),(h),(i),(k),(l) and (m) are declared void.
3. The applicant is at liberty to file in the tribunal two (2) copies and serve on
the respondent one (1) copy of any submissions in support of her
application for costs, by:
4:00pm on 20 December 2016.
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4. The respondent is at liberty to file in the tribunal two (2) copies and serve
on the applicant one (1) copy of any submissions in response to the
application for costs, by:
4:00pm on 9 January 2017.
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Official source: https://www.sclqld.org.au/caselaw/QCAT/2016/535