Maxcon Constructions Pty Ltd v Vadasz & Ors [2017] HCATrans 112 

Significance

The High Court has granted special leave and the appeal will consider matters including whether an adjudication determination under the Building and Construction Industry Security of Payment Act 2009 (SA) (SA Act) can be judicially reviewed for a non-jurisdictional error of law.

The special leave application was heard with an equivalent special leave application arising fro the judgment of Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) [2016] NSWCA 379 (Probuild) in respect of the Building and Construction Industry Security of Payment Act 1999 (NSW) which was also granted. The outcome of these appeals will be very significant in determining the certainty of adjudications under the security of payment legislation in the Australian Capital Territory, New South Wales, Queensland, South Australia, Tasmania and Victoria.

Facts

On 12 May 2017, Maxcon Constructions Pty Ltd (Maxcon) applied to the High Court of Australia for special leave to appeal the decision of the Full Court of the South Australian Supreme Court in Maxcon Constructions Pty Ltd v Vadasz [2017] SASCFC 2 (Decision).

The facts were referred to in our March update. In summary, the Full Court found that the adjudicator had erred as a matter of law in concluding certain provisions of the construction contract were 'pay when paid' provisions and consequently void pursuant to section 12 of the SA Act. The Full Court first found that this error was not a jurisdictional error and secondly, that judicial review was not available for non-jurisdictional error of law. The Full Court reached this view on the basis they were bound to follow the Probuild decision. However Blue and Hinton JJ indicated that, based on first principles and in the absence of persuasive authority, they would have found that judicial review was available for non-jurisdictional error.

Maxcon's application for leave to appeal the Decision raised the following grounds:

  1. whether judicial review is unavailable for non-jurisdictional errors on the face of the record made by adjudicators in Security of Payment matters;
  2. whether the Full Court was correct in determining that the adjudicator's error in applying the SA Act (and section 12 in particular) was indeed a non-jurisdictional error; and
  3. whether it would have been appropriate for the court to partially preserve and partially set aside the adjudicator's decision should it have found it had jurisdiction to grant certiorari.

Decision

Gageler, Nettle and Edelman JJ granted special leave to Maxcon to appeal the Decision in the High Court on all three grounds.