The recent High Court decision of Kirk v Industrial
Relations Commission (NSW)  HCA 1 may have the effect of
again widening the scope to challenge adjudication
Pre Brodyn – relief in the nature of
certiorari was available
Prior to the Court of Appeal's decision in Brodyn v
Davenport (2004) NSWCA 394, the Supreme Court accepted that
adjudication determinations could be challenged for jurisdictional
error and the determination quashed pursuant to section 69 of the
Supreme Court Act 1970 (NSW).
Jurisdictional error included adjudicators refusing to exercise,
or acting in excess of, jurisdiction. Examples include adjudicators
failing to address a question referred to adjudication,
adjudicators determining a question which is not referred to
adjudication or adjudicators determining a question they had no
power to determine.
This position resulted in the often referred to 'tsunami of
litigation' in the 2000 – 2004 period.
Post Brodyn (and current status) – shrinking
the goal posts
The Court of Appeal in Brodyn did not agree with the
cases that preceded it; that certiorari was available to quash an
adjudication determination for jurisdictional error.
The decision in Brodyn meant that once the "basic
and essential" requirements of the legislation had been
satisfied, the adjudication determination would not be overturned
provided that the adjudicator had acted in good faith and gave both
parties the level of fairness required under the legislation.
The basic and essential requirements (non-exhaustive) were
stated to be that:
there was a construction contract;
a payment claim has been served;
an adjudication application has been made;
there has been an acceptance by the adjudicator; and
there has been a determination by the adjudicator with respect
to the amount owing, the due date for payment and any interest
Back to the future?
In Kirk v IRC, the High Court considered whether state
legislation (relevantly, the Occupational Health & Safety
Act 1983 (NSW)) which took away from a state supreme court
power to grant relief on account of a jurisdictional error was
beyond state legislative power.
The High Court held that it was, because it purports to remove a
defining characteristic of the supreme court of the state that
provides for judicial review. By doing so, the High Court
reaffirmed the accepted doctrine that the jurisdiction of the
supreme courts to grant certiorari for jurisdictional error could
not be denied by statutory privative provisions.
Applying this reasoning to the Act, the flood-gates for
challenges to adjudication determinations may once again open on
the basis of jurisdictional error and it creates an opportunity to
challenge the ratio established in Brodyn. Until then, the
decision of Brodyn will continue to be followed.
If the High Court is asked to re-visit Brodyn it will
have to carefully consider striking the delicate balance between
preserving the purpose and object of the Act (facilitating cashflow
to contractors and subcontractors) and preserving the jurisdiction
of the supreme court to grant relief for jurisdictional error.
There are currently two concurrent appeals against the
Brodyn decision that will be heard in the Court of Appeal.
Watch this space!
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