On 13 January 2016, the Supreme Court of Victoria handed down its decision in Milburn Lake Pty Ltd v Andritz Pty Ltd [2016] VSC 3.

Peter Wood (view my bio) has analysed this decision and concludes that it confirms significant impediments to the enforcement of adjudication determinations made under the Building and Construction Industry Security of Payment Act 2002 (Vic) in Victoria.

Background

Unlike some jurisdictions, the settled law in Victoria is that relief in the nature of certiorari is available concerning an adjudication determination that contains an error on the face of the record.

However in mid 2015 the Supreme Court in Amasya Enterprises Pty Ltd v Asta Development (Aust) Pty Ltd [2015] VSC 233 held that where judgment has been entered under section 28R concerning an adjudication determination, section 28R(5) prevents judicial review for error of law on the face of the record. This is important given that the court had said in an earlier case that judgment under section 28R can be obtained on the papers without the necessity of any appearance.

Accordingly, a party wishing to seek judicial review of an adjudication determination has a limited period of time between the issue of the determination and the entry of judgment on an adjudication certificate when certiorari will be available for an error of law on the face of the adjudication determination.

Milburn Lake

The issue before the court in Milburn Lake Pty Ltd v Andritz Pty Ltd [2016] VSC 3 was whether the balance of convenience favoured granting an injunction preventing the entry of judgment so that the respondent was not precluded from relying upon an error of law on the face of the record in judicial review proceedings.

Whilst the court acknowledged that the grant of an injunction absolutely would frustrate the policy and purpose of the Act, namely to preserve cash flow to contractors and to 'pay now and argue later', it held that the balance of convenience favoured the granting of an injunction to prevent the enforcement of the adjudication determination on terms that the adjudication amount be paid into the court. This was probably the inevitable consequence of Amasya.

Who is affected?

The likely consequence of the recent cases including Milburn Lake is that whenever a party to an adjudication determination can point to an alleged error of law on the face of the determination and which amounts to a serious question to be tried, the court is likely to grant an injunction restraining enforcement of that determination without other evidence that damages are an inadequate remedy, but on terms of payment into court. Unsuccessful respondents may avoid paying the successful claimant until the review is determined and confirmed in those circumstances.

It is difficult to see how this result does not undermine the underlying policy purpose of the Act.