Ball Construction Pty Ltd v Conart Pty Ltd [2014] QSC 124

SUPREME COURT OF QUEENSLAND CITATION: Ball Construction Pty Ltd v Conart Pty Ltd [2014] QSC 124 PARTIES: BALL CONSTRUCTION PTY LTD ABN 94 108 548 778 (applicant) v CONART PTY LTD ABN 50 153 867 228 (first respondent) and RICS AUSTRALASIA PTY LTD ABN 18 089 873 067 (second respondent) and JENNIFER WYATT ADJUDICATOR REGISTRATION NO J1070846 (third respondent) FILE NO: BS 7482 of 2013 DIVISION: Trial Division PROCEEDING: Originating application ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 6 June 2014 DELIVERED AT: Brisbane HEARING DATE: 4 February 2014 JUDGE: Douglas J ORDER: Adjudicator’s decision quashed. Further submissions sought as to the form of order and costs. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND CONDITIONS – VARIATIONS – where the applicant and a company entered into a building contract – where that company and the first respondent entered into a deed of assignment with the consent of the applicant – where the director of the original construction company swore a statutory declaration – where the director of the first respondent also swore a statutory declaration – where the -- 1 of 13 -- 2 statutory declarations stated that no variations, claims or disputes existed – whether the statutory declarations and the agreement to enter into a deed of assignment created an estoppel CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where a dispute about the date for practical completion under the contract arose – where liquidated damages and variations were also disputed – where an adjudicator appointed under the Building and Construction Industry Payments Act 2004 adjudicated a payment claim – where the applicant and first respondent entered into a deed – where by that deed the first respondent undertook not to enforce the adjudication certificate – where the third respondent then adjudicated a further payment claim – whether there were jurisdictional errors in the third respondent’s adjudication decision – whether the first respondent had engaged in an abuse of process – whether the adjudication should be declared void or quashed CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – PROGRESS PAYMENTS – whether work carried out before the deed was work under the construction contract CONTRACTS – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – DISCHARGE BY AGREEMENT – NOVATION – whether the agreement between the applicant and the first respondent was an assignment or a novation Building and Construction Industry Payments Act 2004 (Qld), s 3(2)(c), s 7, s 12, s 13, s 14, s 17, s 25, s 26 BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2013] QCA 394, followed Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421, cited David & Gai Spankie & Northern Investment Holdings Pty Ltd v James Trowse Constructions Pty Ltd & Ors (No 2) [2010] QSC 166, cited J Hutchinson Pty Ltd v Galform Pty Ltd [2008] QSC 205, cited John Holland Pty Ltd v TAC Pacific Pty Ltd & Ors [2009] QSC 205, cited McNab NQ Pty Ltd v Walkrete Pty Ltd [2013] QSC 128, cited Northbuild Construction Pty Ltd v Central Interior Linings -- 2 of 13 -- 3 Pty Ltd [2012] 1 Qd R 525; [2011] QCA 022, cited Olsson v Dyson (1969) 120 CLR 365, considered Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWCA 356, cited Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320, cited Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 546, cited South East Civil & Drainage Contractors Pty Ltd v AMGW Pty Ltd [2013] QSC 45, cited Spankie James Trowse Constructions Pty Ltd [2010] QCA 355, cited Walton Construction (Qld) Pty Ltd v Corrosion Control Technology Pty Ltd [2012] 2 Qd R 90; [2011] QSC 067, cited Walton Construction (Qld) Pty Ltd v Robert Salce [2008] QSC 235, cited COUNSEL: B Codd for the applicant M Labone for the first respondent No appearance for the second and third respondents SOLICITORS: O’Reilly Lillicrap for the applicant Gadens Lawyers for the first respondent No appearance for the second and third respondents [1] This is an application to quash an adjudication application and to set aside an adjudication decision made under the Building and Construction Industry Payments Act 2004 (Qld). The adjudication decision is said to be affected by jurisdictional error for a number of reasons which I shall set out shortly. Background facts [2] The construction contract between the applicant (“Ball Construction”) and the first respondent (“Conart”) was the result of their entry into a deed of assignment dated 5 December 2011 in respect of an earlier construction contract between the applicant and a company called That Builder Pty Ltd. That contract was dated 2 August 2011. Conart undertook the obligations of That Builder under that contract pursuant to the deed of assignment on 5 December 2011 with the consent of Ball Construction. [3] Before the formation of the contract involving Conart, the director of That Builder swore a statutory declaration, on 31 October 2011 that “no variations, claims or other disputes (other than those previously agreed to) have been agreed to or exist at this time”. On 1 December 2011, the same man, Maurice Granger, this time as managing director of Conart swore a further statutory declaration to the same effect. Conart appears to have been a “Phoenix” company for That Builder which had fallen into financial difficulties. -- 3 of 13 -- 4 [4] Conart continued the building work under the contract until practical completion was achieved on or about 19 June 2012. On practical completion a dispute arose between the applicant and the first respondent in relation to the date for practical completion under the contract, the applicant’s entitlement to liquidated damages and to payment for variations. Subsequently the first respondent also asserted an entitlement to delay costs. [5] Mr Davenport, an adjudicator appointed pursuant to the Act, adjudicated a payment claim made by Conart on 31 August 2012. Ball Construction indicated that it intended to file an originating application with this court seeking orders that the decision be declared void and an injunction preventing Conart from enforcing the adjudication decision made by Mr Davenport. By a deed made 20 October 2012 (“the compromise deed”) the parties compromised that aspect of their dispute by Conart undertaking not to file the adjudication certificate as a judgment for a debt pursuant to the Act or otherwise to enforce it. Then, on 11 March 2013, the third respondent made the decision the subject of this application in adjudicating a further payment claim made by the first respondent. [6] The argument for the applicant is that there are several jurisdictional errors in the decision, including a denial of natural justice. It is also submitted that, by pursuing some claims inconsistent with the statutory declarations made by That Builder and Conart, the first respondent has engaged in an abuse of process. The result contended for by Ball Construction is that the adjudication should be declared void or quashed. The grounds argued were: 1. that the decision incorporates an amount relating to “construction work” carried out before the formation of the “construction contract” pursuant to which payment is claimed; 2. that the statutory declarations to which I referred were relied upon by the applicant in respect to its financing arrangements and in respect to its agreement to enter into the deed of assignment dated 5 December 2011 which gave rise to an estoppel against two extension of time claims and a claim for retention moneys in particular being made by the first respondent; 3. that the third respondent had failed to perform the statutory task of valuation properly in accordance with the contract and the Act; 4. that the third respondent had failed to accord natural justice to the parties in her assessment of delay costs in that she departed from the positions asserted by each party where notice was not given to them of the intention to assess those costs in that fashion; 5. that the third respondent relied on the compromised previous adjudication decision by Mr Davenport as binding on her when she should have treated it as non-binding, which led her not to adjudicate on matters in issue. [7] Mr Codd’s submission for the applicant went on to argue that severance is not available in respect of the offending parts of the decision so that it should be set aside as a whole. [8] It is convenient to deal with the first and second issues together. The third and fourth issues also deserve joint consideration. -- 4 of 13 -- 5 Incorporation of work performed before entry into the contract and the estoppel argument [9] The first and second arguments were that the claims for work performed before the deed came into existence did not give rise to a potential progress claim and that Conart was estopped because of its statutory declaration from making such claims. [10] At least three parts of the payment claim made by the first respondent related to costs incurred before the formation of the contract with Conart on 5 December 2011. These included two extension of time claims for periods between 1 August 2011 to 25 October 2011 and 16 August 2011 to 15 September 2011 and the retention of monies paid to That Builder pursuant to cl 15(a) of the contract. [11] The submission was that an adjudication decision made pursuant to the Act may not incorporate an amount relating to “construction work” carried out before the formation of the “construction contract” pursuant to which payment is claimed. Reliance was placed on ss 3(2)(c), 7, 12, 13, 14, 17, 25 and 26 of the Act, including the provision in s 7 that the object of the Act was to ensure that a person is entitled to receive and able to recover progress payments if the person undertakes to carry out construction work “under a construction contract”. Similarly, ss 12 and 13 in dealing with rights to progress payments and the amount of progress payments refer to “the amount calculated under the contract”. As McMurdo J said in Walton Construction (Qld) Pty Ltd v Robert Salce:1 “Work which was not carried out under the contract, because it preceded the making of the contract, would appear to be outside the operation of the Act.” [12] In context, that statement by his Honour was not necessary to his decision but it reflects a similar approach to the construction of the expression “under a construction contract” to that adopted by Peter Lyons J in Walton Construction (Qld) Pty Ltd v Corrosion Control Technology Pty Ltd. 2 One must also bear in mind that: “the Act does not create a right to remuneration for construction work – that right is created by the construction contract. What the Act does is to create and regulate a right to obtain a progress payment.”3 [13] The applicant’s argument that these claims for payments arose earlier than its entry into the construction contract proceeded on the basis that the assignment deed was actually a novation. The applicant submitted that the effect of cl 2 and cl 3.4 of that deed was to create a new contract. The parties to that deed were That Builder as assignor, Conart as assignee and Ball Construction which was described as the owner in the deed. Those clauses provided: 1 [2008] QSC 235 at [22]. 2 [2012] 2 Qd R 90, 98 at [42]-[45]; see also McNab NQ Pty Ltd v Walkrete Pty Ltd [2013] QSC 128 at [28]. 3 Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320 at [43] adopted in BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd & Ors [2012] QSC 346 at [56]. -- 5 of 13 -- 6 “2. Assignment of Contract The Assignor with effect from the Assignment Date hereby expressly assigns, transfers and sets over all the Right, title and interest in the Contract (including all Claims, Rights and Obligations, arising out of or under the said Contract) free of all encumbrances and liens in exchange for the Assignment Fee on the assignment date and the Assignee accepts this assignment. The Assignee shall meet the obligations of the Assignor under and by virtue of the Contract and undertakes as from the Assignment Date to punctually and faithfully carry out and observe all the covenants and stipulations on the part of the Assignor contained in or required to be carried out, observed or performed under the Contract as if the Contract had been made and entered into between the Assignee and the Owner, including but not limited to, all Obligations of the Assignor arising under the Contract that relate to any work performed by the Assignor prior to the Assignment Date. … 3.4 The Owner consents to the assignment and agrees to be bound by the Contract as from the Assignment Date as if the Contract had been made and entered into between the Assignee and the Owner.” [14] In a well known passage in Olsson v Dyson,4 Windeyer J, discussing the difference between an assignment and a novation, said:5 “The ultimate distinction, in juristic analysis, between a transfer of a debt by assignment and by novation is simple enough. Novation is the making of a new contract between a creditor and his debtor in consideration of the extinguishment of the obligations of the old contract: if the new contract is to be fully effective to give enforceable rights or obligations to a third person he, the third person, must be a party to the novated contract. The assignment of a debt, on the other hand, is not a transaction between the creditor and the debtor. It is a transaction between the creditor and the assignee to which the assent of the debtor was not needed. The debtor is given notice of it; for notice is necessary to complete an assignment pursuant to the statute or in the case of an equitable assignment to preserve priorities. But the debtor’s assent is not required. He is not a party to the transaction.” 4 (1969) 120 CLR 365, 388-390; see also Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWCA 356 at [131]. 5 Olsson v Dyson at 388. -- 6 of 13 -- 7 [15] The submission was that that analysis, applied in these circumstances, led to the conclusion that a new contract had come into existence with Conart as a party rather than it having become simply an assignee of That Builder’s rights and that the amounts claimed before entry did not arise under that contract between Ball Construction and Conart. [16] The right to a progress payment under s 12 of the Act arises if the person claiming the progress payment has undertaken to carry out construction work or to supply related services under the contract. Conart had not so undertaken in respect of any rights of That Builder to the extension of time claim for the period before the novation. It is difficult to see how it became entitled to a progress payment under the Act stemming from the period when That Builder was the contracting party, not Conart. It may be entitled to claim pursuant to the contract for the rights assigned to it, as Ball Construction conceded through its counsel, but the submission was that those claims were not covered by s 12. [17] Conart’s submission was that the deed of assignment was not a novation because the earlier contract with That Builder was not discharged. It was submitted that the applicant as “owner” under the deed continued to hold retention monies withheld from That Builder for the purpose of the contract works as a whole. That Builder’s rights to the retention moneys were, however, assigned to Conart by cl 2. In consenting to the deed in cl 3.4, Ball Construction agreed to be bound by the contract as from the assignment date as if the contract had been made and entered into between Conart and it. As Windeyer J said in discussing whether a novation had occurred under our system of law:6 “Justinian met the difficulty [of the provision of consideration for the extinguishing of a prior obligation] by providing that a stipulation should not operate as a novation unless the parties expressly declared that their object in making the new contract was to extinguish the prior obligation … However, the requirements of our law are satisfied by a tacit agreement to extinguish the former obligation, and this is inferred when an inconsistent obligation is by agreement substituted.” [18] Here, such a substitution of That Builder’s obligations occurred, with the effect that a new contract came into existence as between the applicant and Conart. What had not occurred in respect of these disputed claims in the language of s 12, however, was the carrying out of construction work or the supply of related goods and services by Conart. That had been done by That Builder. Conart was not entitled to a progress payment under the Act covering those sums. [19] In this case also, any rights Conart may have had as assignee under the deed in respect of the extension of time payments and other claims made by it relating to the period before the deed of assignment were caught by the statutory declarations so as to disentitle it from claiming them as progress payments. 6 Olsson v Dyson at 390. -- 7 of 13 -- 8 [20] The statutory declarations said to establish the estoppel were made before Ball Construction entered into the deed of assignment and were relied on by it, not least because its bank required them in connection with the bank’s construction loan provided to it.7 Prima facie, therefore, the preconditions for an estoppel by representation have been met. [21] The adjudicator was told that these extensions of time appeared to be contrary to Conart’s previously sworn position. Conart argued that no specific estoppel argument was put to the adjudicator so that she did not commit a jurisdictional error in failing to take that argument into account. The submission to her was, however, that the statutory declarations provided that there was no pending claim or dispute before the deed so that those claims had not been sought in accordance with the contract and the claimed extensions of time appeared to be contradictory to Conart’s previously stated sworn position.8 [22] That makes the position sufficiently clear to establish that those claims should not have been brought pursuant to the contract for a progress payment owing under the Act. It was either not work carried out under the contract to which Conart was a party or Conart is now estopped from claiming that it was because of the statutory declaration made by it dated 1 December 2011. [23] If I were not satisfied of that position I would have acceded to the further submission that the pressing of those claims before the adjudicator was an abuse of process which should result in the setting aside of the decision.9 [24] The adjudicator did not try to sever these claims for extension of time payments and for the payment of retention moneys when That Builder was a contractor from the amount assessed by her. The taking of those sums into account was, in my view, a jurisdictional error rendering her decision of no legal effect. That failure to sever those claims is not curable in this court under the current statutory regime.10 It makes the decision, therefore, one that should be set aside. Performance of the statutory task of valuation and breach of the rules of natural justice [25] The claim for delay by Conart was for 120 days payable at a rate of $1,041 per day. The argument for Ball Construction was that, when the extension of time claims were set out in chronological order to avoid double counting, 63 days were claimed before 5 December 2011 and 56 days thereafter. The third respondent concluded that the total delay was either 107 or 108 days, although no claim for such a period was made in the payment claim or the adjudication application. She then allowed 77 days, apparently allowing for a five day week, as five sevenths of that claim at a rate, not of $1,041 per day, but at $800 per day. That daily rate was not based 7 See the affidavit of D B Ball filed 12 August 2013 at para 32. 8 See the affidavit of D B Ball filed 12 August 2013 at p.141 of the exhibits. 9 See J Hutchinson Pty Ltd v Galform Pty Ltd [2008] QSC 205 at [47]-[52]. 10 BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2013] QCA 394 at [62]-[78]. -- 8 of 13 -- 9 obviously on the evidence, but on her own assessment of the claimant’s breakdown of its claimed costs. She did not reveal clearly how she arrived at that result. Neither party had advocated for the approach taken by her. Nor were the parties given an opportunity to be heard on her preferred approach to the task. [26] Ball Construction’s argument was that the third respondent as adjudicator did not apply the contract in reaching the valuation. The relevant contractual provision was cl 22(f) which provided: “Where the progress of the Works is delayed as a result of any of the causes set out in Clause 22(a), any increase in the cost to the contractor in carrying out the Works, including supervision and off- site overheads, arising directly or indirectly out of the delay shall be added to the Contract Sum.” [27] Mr Codd for Ball Construction proceeded to argue that, of the 75 days claimed before the formation of the contract with Conart, only one claim on 25 November 2011 could have resulted in an adjustment to the date for practical completion because a right accrued prior to the novation of the contract. The balance determined by the third respondent included an assessment related to the challenged extensions of time for the period before entry into the contract by Conart which Mr Codd maintained she lacked jurisdiction to consider. Of the claims made after 5 December 2011, they yielded 65 days of delay, giving a total, with the 25 November 2011 claim, of 67 days delay. [28] Perhaps more significantly, Mr Codd submitted that the third respondent did not actually analyse the delay claims so as to ascertain any relationship with the matters set out in cl 22(a) of the contract as potential causes for delay. That clause provided: “22. EXTENSION OF TIME (a) The Contractor is entitled to an extension of the Date for Practical Completion if the progress of the Works is delayed as a result of any of the following causes: (i) an act or omission of the Owner, the Owner’s consultants, agents or contractors or authorised officers of the Lending Authority; (ii) a Variation of the Works; (iii) a Latent Condition; (iv) a breach of the Contract by the Owner; (v) a suspension of the Works in accordance with Clause 20 or Clause 23(f); (vi) inclement weather or conditions resulting from inclement weather; (vii) a claim or proceeding being taken, or threatened to be taken, by a third party; (viii) a dispute with an adjoining or neighbouring owner or occupier; -- 9 of 13 -- 10 (ix) a strike, lockout, civil commotion or industrial action affecting: (A) any person in tile carrying out of the Works; or (B) the manufacture or supply of materials to be used in the Works; (x) a shortage, or delay in the delivery, of materials to be used in the Works; (xi) the unavailability of any labour (whether under a subcontract or a contract of employment) necessary for the Contractor to carry out the Works with reasonable diligence; (xii) an act of prevention by the Owner not otherwise covered by this Clause; or (xiii) any other matter, cause or thing beyond the control of the Contractor.” [29] In that context, reliance was placed on the decision in South East Civil & Drainage Contractors Pty Ltd v AMGW Pty Ltd11 where Jackson J decided that an adjudicator was required to perform the adjudication in accordance with the contract and the Act, whether or not the parties had made submissions as to the proper approach. [30] Here the approach taken by the adjudicator was to conclude that, because the work finished late, the client was entitled to an adjustment under cl 22(f) but, on the applicant’s submission, she did not link a particular delay with a particular cause said to arise under cl 22(a) so as to properly crystallise the entitlement to an adjustment. Mr Codd for Ball Construction submitted that the error was not accidental or erroneous but systemic and avoided consideration of the requirement that there be causation between the event and the delay. This led to a jurisdictional error otherwise vitiating the decision. Again, he asserted that the right claimed needed to be one arising “under the contract” as discussed previously. [31] The submissions for Conart were that any error by the third respondent was of a non-jurisdictional kind where at best she wrongly construed Conart’s entitlement to delay costs arising from cl 22(a). She also relied upon variations decided in the earlier adjudication by Mr Davenport which, in Conart’s submission, she was obliged to adopt by operation of s 27 of the Act. [32] The complaints by Ball Construction connect here with the argument that the third respondent denied the parties natural justice in respect of the method of assessment of the delay claims made by her. [33] In Walton Construction (Qld) Pty Ltd v Corrosion Control Technology Pty Ltd,12 Peter Lyons J said: 11 [2013] QSC 45 at [45]. 12 [2012] 2 Qd R 90, 101 at [58]-[60]. -- 10 of 13 -- 11 “[58] In Brodyn Hodgson JA identified the absence of any “substantial denial of the measure of natural justice that the Act requires to be given” as essential for a valid adjudicator’s decision.13 That conclusion was adopted by Applegarth J in John Holland Pty Ltd v TAC Pacific Pty Ltd & Ors.14 His Honour’s view was in turn applied by McMurdo J in David & Gai Spankie & Northern Investment Holdings Pty Ltd v James Trowse Constructions Pty Ltd & Ors (No 2).15 It appears to have been endorsed by the Court of Appeal in Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd.16 The correctness of the proposition was not in issue in these proceedings. [59] A number of the New South Wales decisions referred to by Applegarth J in John Holland held that there is a substantial denial of the measure of natural justice of the legislation required to be given, when an adjudicator has decided a dispute on a basis for which neither party has contended.17 Again, this proposition was not in issue in these proceedings. [60] In John Holland, Applegarth J held that there was a substantial denial of the required measure of natural justice, when the matter about which the adjudicator did not provide an opportunity to be heard was a point on which the adjudicator’s decision was based, and was significant to the actual determination.18 This proposition, too, was not in issue.19 It may well encompass the proposition from the New South Wales cases referred to by Applegarth J.” [34] The principal that natural justice requires an adjudicator to notify the parties of an intention to decide a dispute on a basis for which neither party has contended does not necessarily vitiate a decision where the issue is not material to the decision made.20 Conart submitted that, here, the adjudicator did not decide the issue in a manner not contended for by either party. Rather, she decided that the causes of delay stipulated by Conart affected the progress of works as it had claimed but she did not accept Conart’s quantification of delay costs. The submission was that there was no material denial of natural justice because the issue was not decided in a way not contended for by either of the parties. [35] It seems to me, however, that, as Ball Construction complained, the third respondent approached the task by identifying the date for practical completion under the contract and the date of practical completion and inferred that all of the time between those dates gave rise to a compensable delay without applying the contract and approached the question of assessing the number of days relevant to the delay 13 Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 [55]. 14 [2009] QSC 205. 15 [2010] QSC 166 [10]. 16 [2012] 1 Qd R 525: see for example 571 [127] per White JA. 17 See also Spankie James Trowse Constructions Pty Ltd [2010] QCA 355 [10]. 18 John Holland Pty Ltd v TAC Pacific Pty Ltd [2010] 1 Qd R 302, 315 [40]. 19 Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355 [10]. 20 Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 546 at [27]-[28]. -- 11 of 13 -- 12 claim in a manner which neither party contended for without giving them notice of how she intended to proceed. [36] When one reads the third respondent’s reasons,21 it is apparent that she proceeded on the basis that the claimed causes of the delays pursuant to cl 22(a) on which she relied were those stated in the extension of time claims. She did say that Ball Construction had provided her with little to convince her that the delaying events relied on did not delay the progress of the works to some degree.22 She did not, however, undertake the task of linking those claims to the causes listed in cl 22(a). That failure led to an omission to assess the claim in accordance with the contract in that respect. [37] In respect of the variation she applied to the amount claimed by Conart of $1,041 per day, making it $800 per day, she pointed out that Ball Construction had not provided any alternative amount to her in its submission. In those circumstances where any error by her was in favour of Ball Construction and not inconsistent with any positive case made by it, I would be reluctant to conclude that there had been a material breach of the obligations to provide natural justice to Ball Construction in this case simply because of the course she adopted in setting the daily rate for extension of time claims. [38] There does seem to me, however, to have been a jurisdictional error coupled with a denial of natural justice at least in respect of the claims for the sums I have earlier decided to have been precluded by the Act and the statutory declaration and the failure to clearly identify how the claimed delays were related to the causes arising under cl 22(a) of the contract. Neither party was given an opportunity to make submissions on the basis of her calculation of the number of days to be allowed and that does seem to me to be a material issue where there was a denial of natural justice. The effect of the compromise of the earlier decision by Mr Davenport [39] The third respondent relied upon parts of Mr Davenport’s earlier decision, the subject of the compromise deed dated made 20 October 2012, as binding on her and proceeded not to adjudicate on those matters in reliance on s 27 of the Act which provides: “27 Valuation of work etc. in later adjudication application (1) Subsection (2) applies if, in deciding an adjudication application, an adjudicator has, under section 14, decided— (a) the value of any construction work carried out under a construction contract; or 21 See the affidavit of D B Ball filed 12 August 2013 at pp.77-81 of the exhibits. 22 See para 93 of her reasons at p.80 of the exhibits to the affidavit of D B Ball filed 12 August 2013. -- 12 of 13 -- 13 (b) the value of any related goods and services supplied under a construction contract. (2) The adjudicator or another adjudicator must, in any later adjudication application that involves the working out of the value of that work or of those goods and services, give the work, or the goods and services, the same value as that previously decided unless the claimant or respondent satisfies the adjudicator concerned that the value of the work, or the goods and services, has changed since the previous decision.” [40] Ball Construction’s submission was that the effect of the compromise deed, by which Conart undertook not to file the adjudication certificate in a court of competent jurisdiction as a judgment for a debt or otherwise to enforce it, was to preclude reliance on the earlier decision by the third respondent. It argued that the court should hold that the adjudication application was an abuse of process insofar as it relied upon rights Conart had undertaken not to rely upon by reason of the compromise. [41] It is unnecessary for me to decide this issue because of my decision that the adjudication should be set aside for other reasons. Conart’s submission was that it had taken no step to enforce the Davenport decision and that allowing s 27 of the Act to have its usual operation did not enforce the earlier decision. Reliance upon the decision did not correspond to the concept of enforcement. Prima facie that submission seems to me to be rational. The mere fact that a party has undertaken not to enforce an earlier decision does not remove it from the category of an earlier decision deciding the value of any construction work carried out or the value of any related goods and services under a construction contract. It remains a decision where an adjudicator must assess the same value for the work or goods and services as in the earlier decision. Were it necessary I would have concluded that the private decision of the parties not to enforce an earlier decision does not affect what the subsequent adjudicator must take into account for the purposes of s 27. Conclusion and order [42] For the reasons I have expressed earlier, the decision of the adjudicator should be quashed. I shall hear the parties as to the form of the order and costs. -- 13 of 13 --